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Katharina zu Dohna – 002518 March 2012

Ian Haan – 012174 Group 70

Jonas Ernevi – 032991

Daniel Hesselberg – 007428

Andreas Skajem Lind – 020442

Camille Lancesseur – 028198

BEM2016 - Consumer Behaviour

For what purpose do students purchase and consume Red Bull?

brief 3

red bull, a worlwide phenomenon 3

History……………………………………..……………………………3

Overall marketing strategy…………….……………………………3

MAIN BODY 4

Red Bull’s influences on sports ………………………………………...4

Sport events attracting students. …………..…………….………4

Student athletes………………………………………..………..……5

Why do students athletes then consumer Red Bull? …………...6

Students’ consumption during nightlife..………………….…………...6

The money Factor……………………………………………………….6

Perception amongst students………………………………………...6

Promotion strategy…………………………………………………….7

Student’s consumption while studying.………………………………….8

Red Bull’s side effects 10

What about Red Bull’s future…? 11

Our opinion on the company 11

References 12

appendix 1 14

appendix 2 18

The aim of the study is to analyse the consumption patterns of Red Bull amongst university students in England.

To achieve this, we focused on three main activities undertaken by students being sports, studying and going out (i.e. nightlife). We felt that there were different consumer behaviours associated with each and we wanted to highlight that feature.

An ethnographic study was created from interviewing a wide range of students, as well as shop managers, nurses, a nutritionist and a Red Bull promoter. From these interviews, we got a wider understanding and a broader point of view to help us on our case study. Surveys were carried out to get statistical insights on how sports and Red Bull’s consumption are intertwined, as well as to get general feedback from students.

Finally, we analysed the future trends of the consumption of Red Bull and its possible decline or increase in popularity.

Red Bull, a worldwide phenomenon

History of Red Bull

Well-known as “liquid cocaine” or “speed in can”, the world’s number one Energy Drink, Red Bull, has been selling on the market for the past 25 years (Red Bull, n.d).

From travelling in Asia, Dietrich Mateschitz discovered the potential of Energy Drinks and the benefits on physical and mental capacities. Indeed, Red Bull is foremost a Thai product drunk by blue-collar workers to increase concentration and energy at work. Red Bull was thus firstly launched in Austria in 1987, as a new product line. The prompt expansion of Red Bull was helped by the consumer society increasingly requiring new products, and discovering new needs. Red Bull spread around the mass market rapidly and is now available in 162 countries, with several billions of cans being sold every year (Red Bull, n.d). Dietrich Mateschitz managed to alternate Red Bull’s image, being a drink consumed by the lower class, giving it a “cooler” aspect for the Western market. He successfully targeted the appropriate markets being athletes and youth (BBC News, 2001).

Overall Marketing Strategy

The brand image created associates youth culture and sports by appealing to a specific age and lifestyle group.

The firm segments Generation Y, being an attractive market because of its size and free spending, but also being highly receptive to energy drinks. As this generation is hard to reach because of resistance to traditional types of advertising, Red Bull marketers developed new advertising plans. Indeed, the firm avoids traditional marketing strategies, and uses cross-promotional tactics, word-of-mouth and buzz marketing to reach its consumers and spread the drinks’ popularity (Solomon et al., 2009).

Red Bull has been undertaking a differentiated targeting strategy with its range of products being Red Bull Energy Drink for the mass market and men, Red Bull Sugarfree mainly aiming at women, Red Bull Energy Shots and Red Bull Cola (Red Bull GmbH, 2011). From interviewing consumers, several women mentioned they drank Red Bull Sugarfree because it is healthier. Finally, Red Bull positioned itself as a market leader, being a worldwide well-known brand (Kastner & Partner, n.d) and the preferred energy drink of 60% of consumers interrogated in a survey undertaken (See appendix 1).

Red Bull’s influences on sports

Sport events attracting students

Red Bull sponsors, creates and owns sport events.

Through one of the greatest sports’ marketing strategy, extreme sport events such as Crushed Ice Series, X-Fighters World Tour, and Air Race are promoted, sponsored and organized by Red Bull (Conway, 2011). Dietrich Mateschitz believes that $300 million are spent every year on sports’ sponsorships (Ho, 2006). This unusual strategy enables the brand to affirm a creative, innovative and exciting image proving it is up-to-date and different: it creates itself an image that students can associate with when going to sport events (Conway, 2011). Red Bull understood that, as stated by Pine and Gilmore (in Ornbo et al., 2008:40), “while commodities are fungible, goods tangible and services intangible, experiences are memorable”. Therefore, Red Bull uses these memorable experiences that are sport events to influence behaviours, creating stimulus evoking past events.

During sport events such as Formula 1 racing, Red Bull uses a highly visible and aggressive marketing strategy that relies on visuals: from cars to athletes’ outfits and helicopters, it dresses every detail with its logo and colours flashing, and redecorates the landscape with signposts; the role of symbolism is key (Ho, 2006). Supporters going to events are immersed in Red Bull’s world. They share a desire to represent the brand, consume the drink and wear its logo on caps, tee shirts etc. It is also a way for Red Bull to indirectly advertise its image and create a word-of-mouth effect (Ornbo et al., 2008).

Red Bull also sponsors opinion leaders and, according to Forbes Magazine, over 500 athletes (Dolan, 2005). For instance, Sebastian Vettel drives for Red Bull Racing and is the current world champion (Conway, 2011). Supporters then believe that if they drink Red Bull, their performance will be increased as well. Besides, Red Bull has become a symbol, relying heavily on visual aspects (two red bulls facing each other). Indeed, the visual implies dominance, machismo and strength. Consumers interpret it as an image of power and masculinity, and are attracted by believing Red Bull can boost their self-esteem. Many product choices are dictated by the similarity the consumer perceives between its personality and attributes of the product.

Student Athletes

As Red Bull heavily focuses on the sport industry, an analysis of student athletes was conducted amongst three different sports teams (lacrosse, golf and skiing), and their consumption habits of Red Bull compared. Red Bull states on their cans that it “vitalizes body and mind”. The company believes that its energy drink can have “significant effects on both physical performance and cognitive functions” (Red Bull, 2010:4). Athletes are continuously pushed mentally and physically to perform well, and are therefore in need for all the possible energy they can get (Red Bull, 2010).

Numerous studies were carried out supporting the previous statement. In a study undertaken by the Institute for Sport, Medicine and Nutrition in Germany, tests on endurance-trained athletes showed that those who drank Red Bull performed better in terms of endurance. This was in comparison to a group who drank a placebo drink as well as to a control group drinking a carbonated drink with added caffeine. The researchers concluded that the increase in endurance was due to the increase in the heart’s pumping capacity (see figure, Red Bull, 2010).

Endurance time at the individual maximum intensity level

[pic]

Source: Red Bull, 2010:8

There is numerous evidence proving that Red Bull truly increases performance. Thus, this should be the reason why student athletes consume it. In addition, some group members undertook the experience of running drinking Red Bull, and drinking a placebo. We could not see any differences, though those consuming Red Bull felt more energetic. However, no results found were exploitable or representative as it could be incorrect because of different body consistence and food eaten that day.

In a second survey targeting the sports teams, the answers revealed that the majority of athletes in lacrosse and golf believed that drinking Red Bull had a psychological effect rather than a physical effect (See appendix 2). The survey also exposed that 85.7 % overall had never seen a test on whether Red Bull works or not.

Why do student athletes then consume Red Bull?

According to the survey, the majority of the lacrosse team stated drinking Red Bull to increase their concentration, while in the skiing team the majority drinks it to increase endurance. In the golf team three reasons stand out, being increasing mental strength, concentration and for the taste. An issue was thus wondering if these factors really were the incentive for students to drink Red Bull.

Red Bull has, for many athletes, grown to become a highly prioritised want due to today’s demanding environment. Athletes need that extra energy to push themselves now more than ever. Hence, the demand for Red Bull, which psychologically satisfies this need, is growing. Many argue that this need could be artificial and is created by Red Bull’s competitive marketing strategy. The need, whether artificial or not, aroused by Red Bull can be argued to be hedonic, where people consume Red Bull to gain self-confidence, for the excitement of drinking it and being part of the Red Bull’s lifestyle. It can also be a utilitarian need, where the drive comes from reducing the need for extra energy during a sport activity.

Hamish Martin, a Student Representative for Red Bull at the University of Exeter, states that he mainly promotes Red Bull to opinion leaders and elite athletes. Hence, Red Bull is becoming a symbol of success. Solomon (2010) believes that this can be seen as the study of semiotics, which examines the symbol (brand) in correlation to their meaning. Everyone wants to be a champion. Consuming Red Bull might give that feeling, especially in sporting situations (Solomon et al., 2010).

Consumers like to believe in things that make them become better in some way. Whether the effect is psychological or physical, consumers desire Red Bull to perform better.

Students’ consumption during nightlife

The Money Factor

Red Bull has dominated the market of energy drinks with a premium pricing strategy, for the better part of two decades (Kastner & Partners, n.d.). According to the research undertaken, Red Bull’s cheaper alternatives only have a minor effect on the consumer purchasing decision. A mere 20% reflects the price sensitivity of students in relation to an increase of 240% in price from Euro Shopper Energy Drink to Red Bull (Red Bull £1.19, Euro Shopper £0.35). However, after interviewing several bartenders, the notion prevails that mainly stocking Red Bull in most nightclubs is the general trend. This could be attributed to going out in itself being considered to some extent as an occasion encouraging generous spending. With 82% of the students surveyed stating they consume Red Bull regularly when going out, the premium price of Red Bull is negligible in light of nightclubs’ high mark-up on alcohol.

Perception amongst students

Students’ motivation to consume Red Bull on a night out could be linked to the ACV model describing the attitudes, consequences and values associated with Red Bull. It is argued that motivation from a psychological perspective “occurs when a need is aroused that consumer wishes to satisfy” (Solomon, 2010:177). One motivational need that surfaces is the notion of belongingness. Students tend to utilize Red Bull to energize themselves in order to stay awake throughout the night, which in turn enables them to enjoy the entire night with their peers. Indeed, based on the interviews undertaken, some students drink Red Bull because it is ‘cool’. However, others drink it to be part of the ‘it’ crowd and reach the standard set by the ideal self (Solomon et al., 2010).

Source: Solomon et al., 2010:186

Maslow’s hierarchy of needs is a simplified model of biogenic and psychogenic needs (Solomon et al., 2010). It establishes how belongingness is a vital stepping-stone towards self-actualization and happiness. Adapted from the Freudian theory, the sense of belongingness is a form of unconscious motive. This is demonstrated by research conducted, in which most students state their motivation to drink Red Bull is to energise, implying their subconscious need for belongingness (Solomon et al., 2010). This can be linked to the fear of missing out, FOMO (Herman, 2008).

Survey results targeting students in general also indicated that 62% students believe in the effects of Red Bull, however, 53% purchase it not due to the effects but rather the exquisite taste of the drink. The dominating taste of Red Bull overpowering the often disliked intensity of alcohol has led it to become the preferred alcohol mixer amongst students, above Coca-Cola. It is synonymous with the number one selling spirit in the world, vodka. The ease of consuming Red Bull with spirit has fuelled binge drinking on campus. Besides, mixing Red Bull with alcohol has been proven to reduce the brain’s awareness of one’s intoxication, leading to more consumption and increased vulnerability (Hitti, 2006).

Promotion’s strategy

The company uses a pull marketing strategy, spending high amounts on advertising and consumer promotion to build up consumer demand for their product. The Red Bull company reaches consumers in four innovative ways: the Red Bull Wings Team, the Student Brand Manager Programme, the Red Bull Bedroom Jam, and the Red Bull Reporter (The Times 100, n.d.). Red Bull promoters follow students everywhere, organise Red Bull sponsored parties around universities in England and offer free Red Bulls. The company enlists “student brand managers whose duties include distributing free samples and gathering information for Red Bull about individual [university] cultures to aid in targeted marketing” (O.Brien et al., 2008:454). For instance, during one of Red Bull’s promotion nights in Exeter, the Student Representative, Hamish Martin, parked his Red Bull car in front of the nightclub Mosaic, and distributed headphones to use while waiting to enter, so as to create a “silent disco”. It is for Red Bull a way to increase brand awareness.

Students’ consumption while studying

34% of young adults (18 to 24 years) are regular energy drink consumers (O’Brien et al., 2008). Red Bull is the ‘ultimate study aid for sleep-prone students’ (Meier, 2010). It has the reputation of having an ‘amphetamine-like’ effect, which has students ‘hooked’ on the drink (Lowry, 2004). University students drink it for three main reasons: insufficient sleep, to increase their energy and to mix it with alcohol (Levy, 2009).

According to a student whom we interviewed at the University of Exeter, Red Bull enables better concentration and longer studying hours.

Understanding the importance of these energy drinks and their impact, various shops and retail stores promote such products using distinctive methods. At the University of Exeter campus shop, Premier, an imposing Red Bull refrigerator is conveniently placed near the cash desk, next to the alcohol stalls, undoubtfully as a point-of-purchase stimulus. For people who spend little time in this shop, Red Bull is the first item they see while queuing. Consequently, they are very likely to buy it. The Premier store focuses on in-store decision-making, hoping to attract spontaneous and impulsive shoppers.

Furthermore, the shop targets exclusively students, selling seven different brands of energy drinks. Because of the 2008 economic downturn, stores value store-loyal consumers and offer an abundance of choices and promotions. For example, they practice price bundling by offering a discount for buying two or more cans of Red Bull (Solomon et al., 2010).

Such promotion strategies are conveniently spread throughout the year, especially during revision periods. Indeed, Gillian Winsor, Store Manager of the Premier shop, explains that during revision times, Red Bull sells especially well. According to the shop’s statistics, it sold 532 cans of Red Bull 250ml, well above the average of 252 sold during the other months. Even though Red Bull is more expensive than the other energy drinks, it is the best-selling drink because of its promise of “improving concentration and reaction speed” (Pride et al., 2006:325). It is the favourite amongst students. Furthermore, we were told that Red Bull Marketing provides free point-of-sale material for the shop to use as they see fit. Indeed, Red Bull energy drinks are selectively and aggressively marketed to university students. The company uses situational segmentation by conveniently putting a note on lecture theatre seats telling students to look under their seats. There they would find concentrated Red Bull shots with an advice to energise themselves during the lecture.

Source: adapted from Solomon et al. 2009

As shown on this perceptual map, Red Bull has by far the biggest market share and, according to our Survey, is the energy drink student are most likely to buy.

Red Bull’s Side effects

Real life consequences

It is true that some consumers suffered from side effects after drinking Red Bull and most of them being related to a combination with alcohol. In an article written in ABC news, regarding an interview of doctors and professors on students’ consumption, it is argued that energy drinks are a dangerous choice of mixer. Further side effects stated by Clemens (in Rodriguez, 2006:1) being “hinder of respiration… cardiovascular risk, impaired judgment, shortness of breath, dizziness, disorientation and rapid heart beat…”

Other cases include consumers fainting, collapsing or to the extreme dying due to consuming excessive amounts of energy drinks. According to Laquale (2007), an Irish basketball player, Ross Cooney, suffered a cardiac arrest after consuming four cans of Red Bull before a game, which according to Red Bull themselves is a normal amount (Paddock, 2008). He was later declared dead due to Sudden Adult Death Syndrome (Gallagher, 2006).

Because of such stories, and little information about the actual effects of Red Bull and its ingredients, Red Bull was prohibited in several countries such as France and Norway. Indeed, the taurine it contains was believed to possibly be dangerous for human health. The company refuted the argument and France and Norway were consequently forced to sell Red Bull as not being able to medically prove the side effects (Bader, 2008). Ironically enough, this image as an “edgy brand” seems only to have increased Red Bull’s popularity amongst students and young people (Gallagher, 2006), and further reinforced its image of thrill-seeking brand it tries to be portrayed as.

What do students say?

When asking students on campus, the response was generally awareness of side effects, however not knowing what they actually are.

Indeed, they knew it varied from heart palpitations to cases on passing out after consuming too much Red Bull. However, few students were concerned about those effects, as their consumption certainly did not seem to be affected. For this reason, Red Bull may have succeeded with something that only few products prior to them have: selling to a mass market that is aware of the danger of consuming the product, other product examples being cigarettes, alcohol or drugs.

Therefore, the group was surprised to see that even though six years had passed since these articles were published, it did not change the amount of consumption among students. If anything, the consumption has gone up. In the latest issue of Cosmopolitan Campus, Catherine Gray, writes about energy drinks as the new “drug on campus” (Gray, 2012). The question we asked ourselves was if this was due to the fact that students simply did not take the speculations seriously or if the positive effects of Red Bull simply exceed the negative ones.

Our findings

To find out the actual side effects of consuming Red Bull, the Chief Nutrient and Dietitian at Karolinska University Hospital in Stockholm, Lotta Klinge Härberg, was contacted. Recent research and autopsies indicate that there may be a high risk related to consuming energy drinks in combination with sports, alcohol or excessive drinking when studying.

She believed possible side effects included bloatedness, heart palpitations, dehydration or even kidney deceases. However, she adds, “these findings are still under investigation and the fact is that we still don’t know exactly what taurine and caffeine in combination with drinking or physical exercise do to us.”

Interestingly enough, in her opinion, she argued that students “should not combine physical exercise with energy drinks since these have a tendency to double or even triple the dehydration”, while sports being the very market that Red Bull targets the most.

With the new information of the side effects we returned to campus to find out what effect this would have on students. After just a few interviews it became clear that the information did not seem to have any substantial affect on students. It may be that Red Bull’s established desire amongst consumers, and explains the irrational side shown by students being interviewed.

What about Red Bull’s future…?

The team have had different point of views on the future consumption trends of Red Bull, and both of them will be explained.

On the one hand, after conducting the investigations, and listening to our interviewees, it is important to take into account that people do eat and drink more healthy food, are careful about their health and their shape. Many competitive energy drinks have been introduced on the market. More recently, organic drinks have been introduced to the public, to which people are responding quite well. Thus, some members do not think that Red Bull will lose total dominance, but might lose market share, and people will certainly turn to alternatives (such as these organic “energy drinks”), which cost less and are more healthy.

On the other hand, even though we found out that there are dangerous effects of excessive consumption of Red Bull when mixing with alcohol, some members still believe the trend of energy drinks will keep growing and that Red Bull will find new venues to market the drinks. The fact that the snow sports industry is rapidly growing is an essential factor that supports the fact that the trend for energy drinks will keep growing (Sports Equipment Industry: US, Europe, Canada, 2010). Some also believe that the trend will start moving towards energy shots rather than cans of energy. The world is globalized and is becoming more demanding and stressful, hence athletes will need to get that extra energy boost.

Our opinions on the company

Before undertaking our investigations on Red Bull, we did not realise how important this company was until reading statistics. The company is present almost everywhere in the world and aggressively promotes its products. Being the market leader, Red Bull has an immense potential to grow further. Besides, due to one of the team member’s intense interest in skiing, we saw Red Bull as one of the hippest brands within the snow sport industry.

One of the most interesting parts of this project was to interview and analyse surveys made by students in order to find out how other consumers actually perceive Red Bull. Some of the members are heavy consumers of Red Bull, whereas others almost never drink it – it was thus interesting to have an external point of view and understand the extreme interest in Red Bull.

Also, going to the bottom of the rumour of the dangerous effects of mixing alcohol with Red Bull enabled us to understand the controversy and possibly reduce some of the team members’ consumption of Red Bull.

References

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[1 March 2012]

BBC News (2001) Red Bull Raging Success, 13 July, [Online]



[25 February 2012]

Business Insights (2010) Next Generation Energy Food and Drinks, Datamonitor, September, pp. 9-15, [Online]



[25 February 2012]

Conway C. (2011) A Sports Marketing Success Story, Sports Networker, 8 March, [Online]



[1 March 2012]

Datamonitor (2010), ‘Sports equipment in Canada’, [PDF], Reference Code: 0070-0218, pp. 10-12, [Online]



[15 February 2012]

Datamonitor (2010) ‘Sports equipment in Europe’, [PDF], Reference Code: 0201-0218, pp. 10-12, [Online]



[15 February 2012]

Datamonitor (2010) ‘Sports equipment in the United States’, [PDF], Reference Code: 0072-0218, pp. 10-12, [Online]



[15 February 2012]

Datamonitor (2011), Red Bull GmbH, Company Profile, March, [Online]



[25 February 2012]

Dolan K. (2005) The Soda with Buzz, , 28 March, [Online]



[29 February 2012]

Gallagher M. (2006) F1 Investor: Red Bull, , 14 June, [Online]



[29 February 2012]

Gray C. (2012) ‘Are these the most addictive drugs on campus?’ Cosmo on Campus, February, p. 20-22

Herman, D. (2008) Outsmart the MBA Clones. New York: Paramount Market Publishing p. 210.

Hitti, M. (2006) Study: Red Bull wont Tame Booze, CBS News, 27 March, [Online]



[27 February 2012]

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[25 February 2012]

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[23 February 2012]

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[1 March 2012]

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[21 February 2012]

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[20 February 2012]

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[2 March 2012]

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[20 February 2012]

Appendix 1 – General survey amongst students

Appendix 2 – Survey amongst Lacrosse students’ athletes

Appendix 2 – Survey amongst Golf students’ athletes

Appendix 2 – Survey amongst Skiing students’ athletes

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