Final answer:
To mitigate the risk of a limited consumer base due to an overemphasis on extreme sports, Red Bull could diversify their market reach by sponsoring a range of events and innovating new product lines while maintaining ethical marketing practices.
Step-by-step explanation:
Red Bull, well-known for its association with extreme sports, faces a marketing challenge due to a potential limitation in consumer base. To address the risk that not everyone is interested in extreme sports, which may limit the company's consumer reach, an ethical solution could be to diversify the brand's involvement in events and sponsorships. Red Bull could expand their marketing strategies to include a broader range of interests, such as music festivals, e-sports, or cultural events. Additionally, innovating with new product lines targeted at a wider audience can help lessen reliance on the extreme sports niche and reduce the potential adverse effects of competition from firms with better or cheaper products.
Furthermore, in ensuring ethical marketing practices, Red Bull should avoid overstating the benefits of their products or targeting vulnerable groups that may be affected negatively by high caffeine intake. Engaging in responsible marketing and promoting a balanced lifestyle would appeal to a wider demographic while maintaining the brand's core values, thus mitigating the risk of having a limited consumer base associated with a narrow focus on extreme sports.