#155 (Red) Bull in the (UK) China Shop
Some may remember that in 2014, Red Bull, the Austria-based manufacturer of the world’s leading energy drink, had settled a more or less frivolous lawsuit in the US that alleged that the company had cheated its consumers with its slogan that the drink would “give them wings” (or, in other words, improve their athletic or mental abilities. The $13.5M settlement definitely was a new kind of experience for global market leader Red Bull, which had seen its fair share of challenges in international markets. Most of the time, they were around health concerns and regulatory compliance, and they happened in many countries. A good example for such challenges was the UK market, which Red Bull entered relatively early, in 1995. National food laws only permitted ingredients that were explicitly allowed. Unfortunately for Red Bull, one of the key ingredients in their signature energy drink, Taurine, was not one of the allowed ingredients, requiring Red Bull to start on a long path of convincing regulatory authorities of its permissibility. Paired with a less than effective initial – very traditional – marketing strategy, the regulatory challenges led to low sales of approximately 2 million cans only, reportedly more than $10 million in losses over the first 18 months and a disappointing market share in 1996 of less than 2 percent in the UK. The charismatic and somewhat impatient majority owner of Red Bull, Dietrich Mateschitz, decided to fire the entire UK staff, he pulled the product from traditional channels, including pubs, and he appointed a new marketing director, who focused his efforts on night clubs and the student market. He hired students to drive around Mini Cooper cars with giant Red Bull cans sitting on their tops, providing free samples to a young demographic at parties. The new strategy quickly paid off. From 1998 to 1999 alone, Red Bull reported 400 percent growth, and in 2001 it had reached a 48 percent market share, which should further increase over the years.Problems did persist however, and periodically popped up. For instance, going back to complaints that were launched as early as 1997, the UK’s Advertising Standards Authority imposed advertising restrictions on Red Bull in 2001. And even as recent as2018, the UK market once again spelled trouble for Red Bull when the British government was intent on banning the energy drink for consumers under the age of 18 for health reasons. 80 milligrams of caffeine per 250 milliliter can and an extraordinary high sugar content have detrimental health effects, so the regulatory proposal. Luckily, the British government got busy with the chaos around Brexit and has not yet implemented the ban yet.
March 25, 2020 @ 5:08 pm
Red Bull is always an example Austrians like to stress, as it is one of the most famous Austrian brands (although the product is originally from Thailand – so literally born global). The success is on their side, but also Red Bull made mistakes as we can learn from their market entry in the UK. The company was focusing on spreading its wings over Europe – the corporate readiness was existing. The product was ready and they also considered the fight against the regulation of the ingredients. Even the target market was a good choice: a good drinking culture, not too healthy nutrition, GDP, economy, language, etc. and the entry mode choice seemed good, but although they have forgotten one little thing – you cannot just change the culture of anything. Thinking to just add it to or replace the pints in the pubs was a nice try, but not enough. The culture of the UK is very much combined with going into pubs, but also with drinking beer – and this cannot be replaced with Red Bull. I’m impressed by how fast the company turned around and started with a completely different marketing approach, which then worked out.
April 20, 2020 @ 1:27 am
In my opinion, Red Bull has created a truly effective marketing strategy. This strategy was very effective because of the young audience they are trying to target. I have personally attended a college where Red Bull recruited many young students to promote their product and it really did encourage young students consume their product. I am not surprised that Red Bull tried to promote their product within the party scene as they have done this in the past and it is now consumed by many young adults when they are going out. I believe the UK has a right to be concerned about the ingredients of the product as this has definitely caused many health issues among young adults who consume it regularly. I recently traveled to London and I was able to purchase a Red Bull at the airport, so it appears that this product will not be going anywhere anytime soon.
April 20, 2020 @ 2:31 am
Red Bull has an extraordinary ability to innovate and adapt in a world of constant change polluted with relentless obstacles. All companies can learn from Red Bull’s experience entering the UK market. According to the article, Red Bull lost more than $10 million in the first 18 months of entry. That is a staggering amount of money. Yet, this financial loss did not cause the company to bail out of the market. Instead, Red Bull took a gamble and embraced a new marketing strategy that was targeted towards a distinct audience with a particular lifestyle. Red Bull has since grown to successfully penetrate international markets due to this type of marketing strategy. In 2012, Red Bull successfully captured the attention of the whole world with their Stratosphere skydive jump. The Red Bull brand can be found everywhere as the company continues to sponsor extreme sports events around the world. The company remains an international energy drink giant.
April 20, 2020 @ 3:39 pm
Red Bull is an amazing company that showed the whole world how you can succeed with the right marketing and innovative approach. I think that Red Bull did not do enough market or consumer research in the UK and just saw it as a promising market they can easily take over. In the end, they did but not without obstacles and I think the ban form the UK will take many years. One thing they also did wrong is not taken cultural differences seriously. Red Bull should have put more effort into thinking about British English drinking culture and product placement in advance. So, they could have avoided unnecessary conflicts and incidents.
Of course, with their strong product presence at the sport and global events, they gained publicity and power but still, it cannot beat culture preferences.
Furthermore, one key factor in succeeding in the UK is that they targeted young customers but the bad move of that is that energy drinks can badly affect your health system if you consume too much. In my eyes, I am against Reb Bull to be consumed by too young people.
There should be some restrictions but on the other hand, Red Bull created jobs and made extreme sport huge among the world and raised the GDP as my colleague Désirée Walter.
In the future, I am really excited how Red Bull will change, adopt or stick to their core marketing and strategy or a new era with a new CEO will begin.
April 20, 2020 @ 6:06 pm
From my perspective Red Bull is usually acting professional when it is about globalization and entering new markets. Usually this company is doing their homework quite well when it comes to penetrating a new market. To meet various regulations of each country, Red Bull is even adapting the ingredients of the energy drink, especially regarding caffeine and taurine.
In this case it would have been helpful to have additionally a look on the Hofstede’s cultural dimensions theory. I can imagine that Red Bull was so focused to handle the legal and health issues that they haven’t kept an eye on a proper market research about the British culture, behaviour and customs. Great Britain is absolutely a beer drinker nation and going to the pub is a kind of a “holyplace” in their culture. From my point of view, it is kind of paradox that Great Britain was claiming the health issue… known for chunk food and extensive beer consumption.
This company is a success story and is up to today the paragon of lifestyle and coolness. Due to flexibility, innovation and foresight of the company, Red Bull was able to relaunch the product in such a fast and successful way.
June 23, 2020 @ 7:13 pm
I think Red Bull is a very good example of the fact that the same marketing strategy does not work equally well in every country. However, they have recognised this very well in a more or less hard way and acted in time. Above all, the exact target group definition is essential for this company. They have done this very well by focusing on young people in the UK. The young target group does not buy the product from Red Bull, but the lifestyle. This is strongly encouraged by Red Bull’s sponsorship of athletes and sporting events. I think this is also one of the reasons why no other energy drink in the world has such a strong market position as Red Bull.
June 28, 2020 @ 12:26 pm
Instead of giving up a market that just brought/ still brings problems, no high sale numbers, and just little revenue compared to other countries where Red Bull already holds the biggest markets shares in, Red Bull decides to face the challenges, and adapt their strategies.
By changing the demographics to a younger audience and moving away from traditional marketing channels it not only regains the interest of the consumers but also repositions itself.
If the government decides to move forward on the age restriction of the drink, I will be sure that Red Bull finds jet another way to adapt and conquer the situation.
January 9, 2021 @ 8:57 pm
It was a surprise to me to read that Red Bull decided to follow a very traditional marketing strategy for their UK market entry in 2014. Of course the reason – “convincing regulatory authorities of its permissibility”- had its own weight…
Apparently, Red Bull, the leading energy drink for many years in a row, is well-known for using the same key strategy for all markets they enter – a modern energy-boosting drink with a focus on the young professionals. For the company, it’s all about promoting a new dynamic way of life instead of just selling a beverage.
I believe that Red Bull’s CEO Dietrich Mateschitz realized that he was going away from his working formula. So he restarted the go-international success recipe by introducing the drink to the targeted consumer persona (young consumers).
While reading the story, I thought about how systematic or unsystematic Red Bull’s International Market Entry approach is.
The fact that they persuaded to enter a market like UK where some of the drink’s ingredients are forbidden, makes me think about whether there was not-enough product readiness analysis or Red Bull just sticked to its aggressive and unique market entry way?
January 23, 2021 @ 6:47 pm
Red Bull has done a lot of things right. It has modified a product which was already available in Thailand and tailored it for the global market. Although, it may not be the initial goal.
But the fact that taurine was not approved in many countries such as the UK, Germany, Italy and France, the ban contributed to the hype of the brand since people started to smuggle the product from Austria across borders. That was one of the coincidences that Red Bull did not plan but contributed to its success. And even if luck was on Matschitz’s side at the beginning of the market entry, one must nevertheless note that many things that Mr. Mateschitz (49% of shares from Red Bull) tackles becomes success. This can be attributed to his perfection and the entire team, who stands all exactly in a line.
UK is one of the best examples – for the English people PUB’s and traditional media are important – but since this target market yielded in failure, Red Bull stayed to its previous marketing strategy and focused on night clubs and students.
Even though the company has suffered some failures, also in other countries, a nationwide sugar tax will not stop its growth.
July 12, 2021 @ 9:41 pm
Dietrich Mateschitz made a right step to strengthen the brand in the UK market in such way. It definitely was a very risky step for Red Bull to change the marketing strategy this much but talking this risk brought the company success. This case shows that there is not ony one right marketing strategy which works for every company in the same way. Each company or brand needs to analyse the markets and think about ways which works best. Especially, when new markets in other countries should be entered. Decision making people need to think outside of the box to find new ways and strategies to growth international like Red Bull did it for example in the UK.
December 10, 2021 @ 6:22 pm
I think redbull has been very effective at entering different markets. Throughout Europe they have seen a lot of success. When I was reading this article my initial thought was that they could change or supplement the ingredients in their drink in order to sell in the UK. Similar to how coke I different in Mexico or Italy. Regardless, I think their decision to target a younger audience such as college students was really smart. I still see them doing this a lot today. A lot of their athletes and influencers are in their 20’s which helps them reach their target audience. In fact I have even heard stories of students receiving Red Bull’s together with their textbooks when they order online. I am not personally a big drinker of Red Bull but I do enjoy the taste. This being said I think they have a good product and are marketing it in the correct way both at home and overseas.
January 7, 2022 @ 5:26 pm
At my first impression it seems like red bull did a lot of the correct things to enter this market. Including extensive research,modifying their product to meet the culture they where trying to enter.
However i do believe their biggest problem was the taurine had not been approved in many countries out side of the USA, for example the article talks about how Germany, united kingdom and france had band this product because people where trying to smuggle it across countries borders.
Not only was Red Bull facing government restriction there was also a concern with the caffeine content and make of ingredients in the drink that cause bac lash for many countries including the UK. This is something I think they should of taken into grater consideration when trying to move into another market. Not everyone country like the amount of caffeine and sugar in their drinks like USA
January 13, 2022 @ 7:00 pm
The UK’s intent on banning Red Bull comes from sound reasoning. Personally, after experiencing Red Bull’s uncomfortable health defects, I would not recommend this product. Red Bull might give you energy, but the amount of caffeine per liter is sure to give most rapid heart palpitations throughout the day. Therefore, someone who drinks this product every day should expect health issues. For instance, last April, a 21-year-old experienced heart failure after drinking this product every day for 2 years. Overall, Red Bull health facts speak for themselves and prove worrisome to a health-conscious Generation Z. Lucky for Red Bull, UK has not implemented the ban yet so there is still time to gain favor with the British community. One strong persuasion technique for Red Bull to gain the UK’s favor is to follow Oreo’s internationalization strategy when entering Korea. The problem with Oreo in Korea was the product packaging was too big and therefore, too expensive for this market. Therefore, the Oreo company made smaller packaging to make the product more affordable. Similarly, Red Bull should adopt Oreo’s strategy of product adaptation and make the Red Bull can even smaller. In conclusion, a reasonably-size Red Bull can, to express to the UK market a balance between caffeine intake and affordability, would be between that of a 5-hour energy and an 8 ounce can.
February 2, 2022 @ 8:51 pm
Redbull is an interesting company to look at because their product can be very dangerous if a massive amount is consumed. When entering into other markets, the sanctions on certain ingredients need to be taken into account due to other countries having different health standards. It is almost as if they got lucky that Brexit occurred because it sounds like they were very close to banning it in the UK. Their idea of keeping their original marketing strategy when entering the UK left me confused as to why they did not conduct this research before. This did take place in the late 90s when social media had not become a tool for marketing as it has now. Firing the entire staff was a very bold move made by their majority owner, but he was clearly successful in his plan. In current times, the Mini Cooper cars with cans of redbull on top are still being seen, and many college students take the opportunity to work with the brand to gain resume experience and the brand in turn gets cheap, and sometimes free, marketing for their brand. Redbull has been around for my entire life, and I personally do not see them going anywhere anytime soon.
June 24, 2022 @ 11:54 am
In my opinion Red Bull had taken their ability to grow and place themselves in the international market. I’m aware that they are usually use the same strategy all around the world and be the energy drink for their young audience. Normally, their strategy worked well in the past few years too. Unfortunately, in this case they maybe have forgotten to do enough market research and get such a result. Many countries have other laws and regulations you have to focus on. So, I think in the UK market it is often challenging to place the product and consider all factors of cultural aspects. On the top it was a good idea to change the strategy and make it to something specials especially for students who use energy drinks for their individuality in the UK. I guess this helped Red Bull and got them back on track in the UK. In my opinion the ban under 18 would not restrict the sale of Red Bull, because the population likes extraordinary products and would maybe consume more after they turned 18 years. Just like it’s with alcoholic drinks, which often are an appeal to the population
March 11, 2023 @ 2:03 pm
The article shows very well that marketing experienced companies like the successful Austrian energy drink manufacturer Red Bull can have trouble approaching foreign countries. Even in Austria, first, it was not easy to launch the product successfully. Starting with word-of-mouth marketing and the feeling of uniqueness made the drink popular in Austria.
Especially for Red Bull it is essential to be successful in marketing as the strategy of the company is based on the brand. The yearly marketing expenses of the company in 2022 are estimated to be €2.9 billion which is 25-30% of the yearly revenue. The brand is associated with extreme sports, nightlife, and raising body energy even though the ingredients are not healthy. It mainly includes taurine, caffeine and a lot of sugar.
Health regulations are a topic that makes it not easy for Red Bull. For example, in France, the brand was only permitted in 2008 without restrictions. The European Food Safety Authority (EFSA) and other food regulatory agencies have limited the levels of caffeine, taurine and glucuronolactone.
Strict advertisement restrictions and health regulations in the UK make it hard for Red Bull to be successful.
March 20, 2023 @ 8:56 am
From my experience, I know that RB conducts a comprehensive assessment of the most efficient approach before each market entry. The fact that even RB doesn’t always achieve the desired success with its planned approach shows that companies need to be flexible about their strategy. Finally, RB also relied on the proven strategy of “student marketing”, which was also the key to successfully enter its first ever market, Austria.
The launch of its energy drink created a so-called “blue ocean” for RB, which means a market space that has not been discovered yet. Consequently, the biggest challenge for market entries was the regulatory framework of the target country, which usually failed to regulate the handling of such a product. This regulatory uncertainty also influences the specific marketing strategy. Germany, the intended home market, initially banned RB’s product at all. Even after its successes in other markets, RB had to use a judicial loophole to enter the German market. Since Union law requires mutual recognition of goods, RB used the fact that the product was already sold in UK. Due to this obligation of mutual recognition, Germany was obliged to authorise the sale of the product according to EU law.