Brand Extension Report: Analyzing Red Bull's New Product Strategy

This report examines Red Bull's brand extension strategy, specifically its move into the protein powder market. It begins with an executive summary outlining the report's objectives, which is to identify the impact of new product development on brand extension. The report utilizes secondary research to analyze Red Bull's existing brand values, target market (primarily young adults aged 16-30), and the competitive landscape. It delves into the analysis of the new market using PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The report discusses the new product development strategy, including line extension and brand extension. It compares Red Bull's protein powder to competitors, evaluating threats of new entrants, substitute products, and the bargaining power of buyers and suppliers. The conclusion highlights the potential success of the brand extension due to Red Bull's strong brand image, supported by the secondary research. The report includes references to academic journals, reports, and online resources to support its findings.

BRAND EXTENSION- ONLY
REPORT

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................1
INTRODUCTION...........................................................................................................................2
METHODOLOGY .........................................................................................................................2
Secondary research ....................................................................................................................2
FINDINGS ......................................................................................................................................2
Existing brand and Brand values ................................................................................................2
Target market .............................................................................................................................3
Analysis of New market .............................................................................................................3
Explanation of new product .......................................................................................................4
Competition ................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

EXECUTIVE SUMMARY
Brand extension refers to using existing brand for promoting a new product or service.
The Aim of the study is to identify the impact of new product development for brand extension.
Redbull is brand for energy drinks which is involved in providing the customers with various
energy drinks with ingredients that consist of caffeine , taurine, sucrose etc. The brand value of
Redbull is equal to $10.4B which shows that is the most popular brand in context of energy
drinks. This report has gathered information through secondary research. Moreover, It has
provided information about the external environment which will affect the new product It
consisted of PESTLE analysis.
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INTRODUCTION
Brand extension refers to using existing brand for promoting a new product or service.
The Aim of the study is to identify the impact of new product development for brand extension.
Redbull is a brand for energy drink which is having 6.302 billion cans sold in year 2017. The
market share of this brand is 26.4 %.
METHODOLOGY
Secondary research
This report will carry out secondary research for identifying the information relating to
Redbull. It will consist of information gathered through Redbull website, Mintel report and press
articles for the existing brand. Secondary research conducted will assist in gathering information
for Redbull target market, demand of the product which will be produced by the brand etc.
Secondary research consist of data gathered through books and journals which provide
understanding of the performance and market share of the firm in the industry (Lane and Fastoso,
2016). It has gathered information for identifying the demand of the customers and their taste
and preference using books and journals , reports , articles etc.
FINDINGS
Existing brand and Brand values
Redbull is brand for energy drinks which is involved in providing the customers with
various energy drinks with ingredients that consist of caffeine , taurine, sucrose etc. The brand
value of Redbull is equal to $10.4B which shows that is the most popular brand in context of
energy drinks (Red Bull, 2018). As per the Kapferer's brand identity prism which consist of
characteristic that reflect the brand identity. The Brand identity prism consist of physical
features, relationship,
Reflection, personality, culture and self image (Keller, 2016). The physical features of Redbull
includes Slender can with blue and white color for background and red and gold for Logo.
Relationship for Redbull include a trust relation In which the brand swears to provide
wings to consumers by providing them energy. Redbull present a perfect drink for young and
Dynamic people that wants to go beyond their limits. Reflection is associated with people that
want to experience new things and emotions. Personality for Redbull in the mind of people is
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energetic, useful, unique, crazy, Ambitious etc (Boon, Grant and Kietzmann, 2016). The motto
of Redbull is to extend its scope of activities and try new tendencies, experiences etc. Self –
image of Redbull includes daring, adventurous, sociable etc.
Target market
Redbull in order to target market for the new brand Extension has divided population in
demographic segmentation on the basis of their age, gender, income , occupation etc. The people
of age group 16-30 years provide the higher share for the customer base. Redbull mainly target
males but females also are included in their customer base (Miniard and et.al., 2018). In
demographic segment their main target is teenagers and young people. The target Audience for
the new product will be the young people as the most of the consumers for red bull are from this
age group.
Analysis of New market
PESTLE analysis Political factors : These are the factors which will affect the new product of Redbull. It
consists of government factors such as rules and regulation which will affect the new
product. For example, Increase in tax rate will increase the cost of new product due to
which fewer customers will be attracted. Economic factors : It consists of interest rate, inflation rate, exchange rate etc. Redbull
protein powder which will be manufactured by the company will be affected by these
factors (Chun and et.al., 2015). For Example, Increase in price of protein power will
reduce the customer for that product. Social factors : It consists of taste and preference of customer, beliefs etc. This product
will help in development of society. Technological factors :If there is increase in technology then the new product will be
affected. Legal factors : There are various laws and regulation which are made for health and
safety and this product will provide opportunity for Redbull.
 Environmental factors : It provides with various waste disposal policies which the
company must adhere in order to provide sustainable product.
Ansoff's Grid
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This model consist of market penetration, diversification, market development and
product development. Market penetration : This strategy focus on increasing the sales of existing products in
the existing market by reducing the prices. Diversification: It refers to reaching new market with new products. Market development: It refers to reaching new market with existing product(Chun and
et.al., 2015).
 Product development : This strategy focus on reaching the existing market with new
product. Redbull is using this strategy and is manufacturing the protein powder which is
new products which it will provide in its existing market to increase its market share.
Explanation of new product
Tauber's brand extension options consist of following : Line extension : Existing brand name is used for established products. Brand extension : New product is introduced with the existing brand name. Redbull is
using this option for product development (Walsh and Williams, 2017). The packaging of
Redbull protein powder will be done in red and gold color. The product will be given
high preference by customers as the firm is having strong brand image. Flanker brand : New brand is introduced for existing products.
 New brand : New product is introduced with new brand.
Competition
Comparative factor Redbull protein powder Omega Protein Corporation
Threat of new entrants Redbull is having the strong
brand image as there is low
impact on this brand (Yuan
and et.al., 2016).
It is dealing in protein only so
it is having high impact of new
entrants.
Threat of substitute product It is having low threat of
substitute.
It is having high threat of
substitute.
Bargaining power of buyers It is having medium
bargaining power due to its
It is having high bargaining
power of buyers as it is not so
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strong brand image popular.
Bargaining power of suppliers It is having low bargaining
power of supplier.
It is having high bargaining
power of supplier.
Existing rivalry It is facing high rivalry in the
exiting market.
It is facing less competition in
the existing market as there are
less companies in this industry.
CONCLUSION
From the above report it can be concluded that the brand extension will be successful as
Redbull is having strong brand image. This report has gathered information through secondary
research. Moreover, It has provided information about the external environment which will affect
the new product It consisted of PESTLE analysis.
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REFERENCES
Books and Journals
Lane, V. R. and Fastoso, F., 2016. The impact of repeated ad exposure on spillover from low fit
extensions to a global brand. International Marketing Review. 33(2). pp.298-318.
Keller, K. L., 2016. Reflections on customer-based brand equity: perspectives, progress, and
priorities. AMS review. 6(1-2). pp.1-16.
Miniard, P. W. and et.al., 2018. What brand extensions need to fully benefit from their parental
heritage. Journal of the Academy of Marketing Science, pp.1-16.
Chun, H. H. and et.al., 2015. Strategic benefits of low fit brand extensions: When and
why?. Journal of Consumer Psychology. 25(4). pp.577-595.
Walsh, P. and Williams, A., 2017. To extend or not extend a human brand: An analysis of
perceived fit and attitudes toward athlete brand extensions. Journal of Sport
Management. 31(1). pp.44-60.
Yuan, R. and et.al., 2016. Reciprocal transfer of brand identity and image associations arising
from higher education brand extensions. Journal of Business Research. 69(8). pp.3069-
3076.
Boon, E., Grant, P. and Kietzmann, J., 2016. Consumer generated brand extensions: definition
and response strategies. Journal of Product & Brand Management. 25(4). pp.337-344.
Online
Red Bull. 2018. [Online]. Available through :
<https://www.forbes.com/companies/red-bull/#75e9c07061ce>
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