Role of Marketing Function in Brand Extension Process - Red Bull Case Study

This report discusses the brand extension process and marketing function of Red Bull company. It explores different strategies of marketing and the role of marketing in successfully expanding a brand globally.

MG412 PRINCIPLES OF
MARKETING

Executive Summary
Marketing is very major function to an organisation, and it plays an effective role to
venture for successfully expanding their brand globally. This report is completed based on the
role of marketing function in brand extension process.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
METHODOLOGY..........................................................................................................................4
FINDINGS.......................................................................................................................................5
Existing brand and its brand values.............................................................................................5
Description of Target Market......................................................................................................6
Analysis of the New Market with its Trends...............................................................................7
The New Product’s Explanation..................................................................................................8
Competition.................................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Marketing is the most important and valuable function to different companies and
businesses, and this is why currently top-level management of each business tries to make its
marketing function very effective for gaining huge benefits and advantages in the market place
(Dixon, Lee and Scully, 2019). This report discusses the brand extension process and marketing
function of Red Bull company. Basically, Red Bull is an Austrian beverage business which
currently serves in many nations. This business generally offers energy drink products different
customers in market place. This report discusses different strategies of marketing as well.
MAIN BODY
METHODOLOGY
Currently there are different methodologies available to a person or a business for
researching new data and information about the chosen topic, in which qualitative method and
quantitative method are considered as two key research methods in the market place. In this
situation, the research and development team of Red Bull can choose any method for gaining
data relating to different market places and their existing trends. Basically, qualitative method of
research helps in gaining data and information through interviews, meetings, books & journals
and observation, etc. On the other side, quantitative method of data contributes in gaining
information through mathematical and numerical data.
However, there is only qualitative method of research has been used in this report,
because it contributes in collecting data through observation, books & journals, business
magazines and newspaper articles etc. There are PESTLE, Ansoff matrix, Kapferer’s prism etc.
tools and frameworks also has been used here for enabling Red Bull for successfully extending
its brand in the new market place, named; Ireland (Lopez, 2020). Basically, the management of
this beverage venture has decided to extend its brand in beverage industry of Ireland by offering
its newly developed product, called; sugar free edition of Red Bull. Of course, this business has
already served in this country, but not at the large scale, so the brand extension process will help
to company for increasing its levels of profit margins.

FINDINGS
Existing brand and its brand values
Current brand value of Red Bull is very effective in the market place, and this is why it is
gaining huge competitive advantage in market place. Most people or customers within the
market like to buy Red Bull’s products and services, just because of its quality products and
services. The Kapferer’s prism tool has been used below for showing the effectiveness of brand
value of Red Bull in global beverage industry.
Kapferer’s prism is basically a tool for businesses and venture for knowing effectiveness
of their brands in the market place. Basically, it contributes in showing own brand identity also
to different people in market place (Ghoshal, 2020). This tool includes six key elements which
has been described below for showing effectiveness of their Red Bull brand in market place.
Physique: Red Bull is currently a multinational beverage business which currently serves in
more than 172 countries. Business expansion strategy of this venture is very excellent, because
management of this business has succeeded in expanding own business operations many
countries in its just 33 years of business operations.
Personality: Upper management of this business has an excellent as well as impressive
personality and this is why currently many entrepreneurs in the market place follows different
management and leadership styles. The management of Red Bull tries to communicate very
effectively to all people or stakeholders for positively affecting them.
Culture: Culture of the workplace in Red Bull is very positive, because upper management said
that when a busines has a positive or healthy work culture, then existing employees of that
workplace like to put their huge efforts in daily operations of business.
Self-Image: Self image or brand image of Red Bull company is also very positive in
international beverage industry, because most of people or customers very like to consume
products and services of this company due to its excellent quality and customer services.
Reflection: Upper management of company not compromises with the quality of different
products and services of Red bull. It uses various approaches of operations management in its
workplace, like; TQM and JIT for systematically developing its wide range energy drink.

Relationship: Currently the management of company has maintained an excellent relationship
with its various stakeholders, because the management says that an effective relationship with
stakeholders of people always enables to a business for gaining very positive outcomes in the
market place (Kumar, 2016). The company has considered the concept of employee relations as
well.
Description of Target Market
Currently the Target market to Red Bull is beverage industry of Ireland, because most
people in this country like to take energy drink in their daily lives for being very enthusiastic.
Currently there are different techniques and tools available in the market place which this
venture can use for properly targeting its customers in the new market place while brand
extension. For example; STP model is very helpful in targeting a customer or a market segment
in market place, in which this model is used below for Red Bull as well to target people in
Ireland.
STP model
STP model is mainly considered as the marketing strategy which includes three key
stages of targeting customers, in which these all three stages have been discussed below;
Segmentation: Segmentation is one of key stage in this model, in which upper management of
Red Bull have to order its marketing team for dividing the whole large market into small
segments of market. It can divide market according to demographically and geographically.
Targeting: Targeting is the second and one of key stages in this model which can encourage to
company for targeting people or customers of Ireland on the basis of their personal background.
For example; it can target customers according to their interest, attitude, ethnicity and religion
etc. Currently mainly people who comes from age group of 18 to 40 and who comes from hire
income group are targeted customers of Red Bull.
Positioning: For proper positioning new product, this business can improve its supply chain
strategy (Dhungana and Pfefferle, 2016). On the other side, the company have to make an
effective relationship also with different local people of Ireland.

Analysis of the New Market with its Trends
Market analysis is very mandatory task to Red Bull before extending its brand in Ireland,
in which the PESTLE analytical tool has been used below for analysing its new market and its
trends.
PESTEL Analysis
PESTLE analysis enables businesses for knowing impact of their six key external
business environment factors.
Political factors: Currently political factors of Ireland very positively affect to existing MNCs of
nation, in which this will positively affect to Red Bull as well, because it has imposed very low
rate of taxation.
Economic factors: Economic factors of country will negatively affect to this nation, because its
current economic conditions are suffering from slowdown due to corona virus pandemic.
Social factors: Most people in this country like to consume quality products and services, and
this social factor can very positively affect to Red Bull because this company has already
provided quality products and services.
Technological factors: The company can improve its performance and productivity in market
place with the support of existing technological factors of Ireland, because this nation is very
advance in technology.
Environmental factors: Environmental factors of company will impact to business for not
conducting such activities which can impact badly to the natural environment.
Legal factors: These factors will affect to business for adhering all legislation, ethics, standards
which has formulated by local government and parliament of Ireland (Purcell, Williamson and
Ngaluafe, 2018).
Ansoff’s Grid Matrix
Ansoff matrix is a set of four marketing strategies, in which all four strategies have to be
considered by this company while brand extension.

Market penetration: This strategy contributes in using existing products and services for selling
them within present market segments.
Product development: This strategy can encourage to business for producing a quality product to
launch it in existing market place.
Market development: Market development strategy is helpful to Red Bull for extending its brand
in new market place.
Diversification: According to current situation, the business has to adopt this diversification
strategy of matrix, because it enables to enter in the new market with own new products and
services (Sheth, Uslay and Sisodia, 2020).
The New Product’s Explanation
Recently the management of Red Bull has developed a new product, named; sugar free
energy drink which was developed with different natural ingredient. According to management,
this product will make customers very enthusiastic and energetic in their daily live.
Competition
Currently there is huge competition in the beverage industry of Ireland, and this factor
will become threat to Red Bull (Hanifawati, Ritonga and Puspitasari, 2019). In this situation,
marketing team of company will require to use different strategies to systematically deal with
this market competition.
CONCLUSION
It can be concluded that in this dynamic world, if upper management of a business plans
to extend its brand in international market, then it will be highly required to consider its
marketing function properly, because there is no venture can successfully extent its brand in any
new market place without considering its marketing function. By following all mentioned
strategies, the management of Red Bull will be succeeded in expanding own brand in new
decided market place.

REFERENCES
Books & Journals
Dhungana, R. K. and Pfefferle, A., 2016. Challenging Cocacolisation of Rural Nepali Market:
The Role of Education. Journal of Education and Research. pp.31-48.
Dixon, H., Lee, A. and Scully, M., 2019. Sports Sponsorship as a Cause of Obesity. Current
obesity reports. 8(4). pp.480-494.
Ghoshal, N. D., 2020. Digital marketing: the opportunity and the imperative. International
Journal of Public Sector Performance Management. 6(2). pp.246-259.
Hanifawati, T., Ritonga, U. S. and Puspitasari, E. E., 2019. MANAGING
BRANDS’POPULARITY ON FACEBOOK: POST TIME, CONTENT, AND BRAND
COMMUNICATION STRATEGIES. Journal of Indonesian Economy and Business:
JIEB. 34(2). pp.183-200.
Kumar, N., 2016. How to Protect Your Brand When Your Endorser Goes Rogue. Managing
Intell. Prop. 259. p.20.
Lopez, S., 2020. Value-based Marketing Strategy: Pricing and Costs for Relationship Marketing.
Vernon Press.
Purcell, S. W., Williamson, D. H. and Ngaluafe, P., 2018. Chinese market prices of beche-de-
mer: Implications for fisheries and aquaculture. Marine Policy. 91. pp.58-65.
Sheth, J., Uslay, C. and Sisodia, R., 2020. Strategies for Generalists, Specialists, and Ditch
Dwellers. In The Global Rule of Three. (pp. 39-71). Palgrave Macmillan, Cham.