Red Bull, the leading producer in energy drinks is currently being sued by Benjamin Careathers of New York. The lawsuit against the defendant, Red Bull is for charging a premium price on a product that provides the same type of ‘mental boost’ as other alternatives such as coffee.
Essentially, the cause of this lawsuit is consumer perception. Red Bull has never stated that their product is superior to coffee. Their whole advertising campaign is based on their slogan “Red Bull Gives You Wings”, a metaphor for replenishing individuals. It gives you the temporary increase in mental capacity and helps revitalize their energy levels.
The so-called “premium price” that Red Bull charges is justifiable. The beverage is not a necessity to life and thus, it is price sensitive. If Red Bull decides to increases it’s price, it faces the trade off of increased profit per unit and decreased sales. In an economic perspective, the market drives the energy drink to it’s equilibrium price. The price of a Red Bull is higher than coffee because of the value it gives to customers. Some people do not like the bitter taste of coffee, and thus when they need that extra jolt of energy they rely on energy drinks such as Red Bull.
In my opinion, the lawsuit is a complete waste of the both the court’s time and the taxpayer’s money. If you personally deem that a product is overpriced compared to an alternative, you can simply refrain from purchasing the product. The fact that the company sold a total of 4.631 billion cans of Red Bull worldwide in 2011 is an obvious indicator that this product provides value to millions of customers.
In addition, I do not feel like Red Bull violated any ethics through their marketing practices. Their slogan “Red Bull Gives You Wings’ is simply a metaphor for helping consumers through daily events. The majority of consumers are WILLING to pay a ‘premium price’ in order to stay awake during a meeting, cram for a final exam amongst other activities.
source: click here