case study / red bull /
A BULL MARKET
44 / 45
CASE STUDY / RED BULL / A BULL MARKET /
RED BULL DEFIES GRAVITY AND
CONVENTION. ONCE THE PRESERVE OF
TIRED THAI TRUCK DRIVERS, THE BRAND
SHIFTED NEARLY TWO BILLION CANS LAST
YEAR AND DOMINATES EVERY NATIONAL
MARKET IN WHICH IT IS PRESENT. ITS
GRASSROOTS MARKETING AND SAMPLING
STRATEGY HAS SPAWNED A LEGION OF
ADMIRERS, FROM HIP CLUBSTERS TO
JADED CUBICLE-DWELLERS. ITS CAPACITY
TO MAKE FRIENDS ALONG THE ENTIRE
SPORTING SPECTRUM, VIA CRICKETERS
AND GOLFERS TO AEROBATIC PILOTS AND
PEOPLE WHO THROW THEMSELVES OFF
MOUNTAINS FOR FUN HAS TURNED THE
BLUE AND SILVER CAN INTO A SYMBOL FOR
A WAY OF LIFE / SUZY BASHFORD UNCOVERS THE STORY
BEHIND AN ICONIC DRINK THAT SELLS ON FUNCTION RATHER THAN TASTE /
case study / red bull /
Revolutionary. Multi-faceted. Anti-brand. Nonconformist. These are all terms that have been used to
describe Red Bull's marketing approach. But ask the
man who came up with the now ubiquitous ‘Red Bull
gives you wiiings’ slogan to shed some light on this
hugely successful brand strategy, and you realise it is
actually overwhelmingly simple.
‘Red Bull is all about making friends. Not buying people.
Because Red Bull became a friend, a real personality,
people feel emotional towards it. They do things for us
that they wouldn't do for Coca-Cola,’ says Johannes
Kastner, founder of international advertising network
Kastner & Partners. The agency has been working on
the account since 1984, three years before the brand's
official launch, and has been integral to its product
design and development.
This is hardly the answer you would expect for a brand
with such an edgy image, steeped in urban legend and
living life at the limits. The strategy is so simple that it
could even be mistaken for a playground guide on how
to get down with the ‘in’ crowd. In fact, the way that
Kastner describes the approach is startlingly similar to
the definition of a good friend given on charity
Kidscape's website: ‘Good friends show an interest in
what people do; go around with a pleasant expression
on their face; ask to join in, don't demand; offer to help
others with work or carry things; invite people to do
something; hang around places where other people
they make friends with are; are good at thinking of
interesting things to do; are willing to share; are
humourous; and are good at organising games or
activities.
(www.kidscape.org.uk/childrenteens/makingfriends/1m
akingfriends.shtml)
Whether Red Bull is building a start-gate to allow an
up and coming snowboarder to improve his race
technique, throwing parties with free drinks so that
clubbers can dance all night or helping students stay
awake while revising, these rules of the playground are
applied scrupulously.
‘We have a lot of respect. We don't push people to do
anything. We give them ideas. We give them a product.
They can do want they want. In TV clips we never ask
them to say things or give them logos. We're there to
help them. We're there to give them experiences they
can't buy. It's humanistic thinking,’ says Kastner.
An example of one such experience came after the
English cricket team famously won The Ashes this
summer. Red Bull flew the team members and their wives
in one of its 'Flying Bulls', a Douglas DC-6, to Venice for a
week. Even before this gesture, Andrew Flintoff and Kevin
Pietersen happily told the broadcast media how they drank
Red Bull before a game. ‘You can imagine what the
cricketers said when they got home after that,’ smiles
Kastner.
Red Bull boasts at least 70% of every national market
in which it is present and is still growing rapidly. Last
year company sales rose by 32.3% from 1.261 billion
Euros to 1.668 billion Euros. Sales were up 50% in the
USA, 43% in the Middle East, 40% in Australia and
30% in Eastern Europe. Also in 2004, the company
established new subsidiaries in Canada, Turkey, Russia
and Romania.
Red Bull's appeal has grown by targeting opinion
formers, who drive sales through word of mouth and by
association. Extreme sportsmen. Hollywood stuntmen.
Barmen at the trendiest haunts. Formula 1 drivers. Now,
even golfers. This seeding strategy has made Red Bull
the clear global energy drink market leader, selling
1.935 billion cans in 2004.
What these key audiences say is infinitely more
important to Red Bull than what the media says.
Compared to many other brands in the 'lifestyle' sector,
Red Bull certainly doesn't bend over backwards to woo
and accommodate reporters writing about the company,
yet it still manages to garner significant media coverage
for its exploits.
At Red Bull events, journalists tend to come away with
the impression that the PR team's attention is clearly on
the participants for whom the event is being thrown,
rather than the peripheral media types. To Red Bull, the
participants are the real opinion-formers. After all, as
Red Bull knows, showing off is no way to make friends
and influence people.
‘To advertise oneself is not good. We don't say “come
and look at how wonderful we are everybody”. That
would not be laid back. That would be aggressive, oldstyle marketing. It's always better to let others say how
great we are’, states Kastner.
He adds that Red Bull doesn't even promote one of its
most defining and famous worldwide events in a way
that garners positive coverage for the brand: the
Flugtag. Participants make wings and attempt to fly in
their homemade contraptions, a sight witnessed by
thousands of spectators, sometimes more than 50,000.
According to Kastner, the Flugtag is only advertised in a
way that helps people who have created the machines
be seen. At Flugtag time, Red Bull replaces its normal
above the line ads with pictures or footage of previous
competition participants. These may catch people
drinking Red Bull or wearing a Red Bull helmet, for
example, but the branding is incidental to the main
message that focuses on encouraging performers to
take part.
Kastner argues that such a strong bond has been
©Karoly Arvai
46 / 47
RACE WORLD SERIES / THE FLYING BULLS AEROBATICS TEAM 2005 /
©Christian Pondella
FLUGTAG / BRATISLAVA 2005 /
FLUGTAG / MIAMI 2004 /
FREESTYLE SKIING / HENRIK WINDSTEDT /
©Berhard Spottel
©Mattias Fredriksson
“Because Red Bull became a friend, a real personaliy,
people fel emotional towards i. They do things for
us that they wouldn't do for Coca-Cola.”
FELIX BAUMGARTNER / CHANNEL CROSSING /
case study / red bull /
created between consumers and Red Bull, that when
they walk down the street clutching their can they are
using it to identify themselves: ‘They want to express
something by holding this can. They want to say “I am
like the personality of this can”. They want to say we are
professional. We are smart. We are good at sport. We
first kissed a girl when we were twelve. We smoked
cigarettes very early. Maybe we've spent a night in
prison before because of a big party we had. But we are
smart, we don't spend all our time getting drunk.’
In other words, as Lars Emilson, the chief executive of
the brand's can company Rexam said in September
when it delivered its 10 billionth unit to Red Bull: ‘The
can has become a symbol for a way of life’. This symbol
is Red Bull's capital. As Austrian billionaire founder
Dietrich Mateschitz has said: ‘we have no real material
assets, our asset is the brand’.
Red Bull's slogan itself arose from the friendship
between Mateschitz and Kastner. This partnership too
has been fundamental to the brand's strong personality,
says Kastner: ‘We'd both lived the 70s, with The Stones
and Spencer Davis and so on and we thought differently
[to other marketers]. Advertising was always telling
people things like “Your laundry is not white enough”.
We always thought that was stupid. We thought
differently. Finally with Red Bull we were able to execute
our thinking. We were two entrepreneurs. We didn't
take ourselves too seriously. We weren't pushy. We
were laid back. The brand is very personal. We're both
in it. That's why it's so authentic.’
The pair met while studying at the World Trade
Institute in Vienna and Mateschitz turned to Kastner
when planning the launch of Red Bull. Born in 1945,
Mateschitz grew up in the Mürz valley, Styria,
surrounded by a family of teachers. He, however, didn't
thrive academically at school. According to Trend, an
Austrian magazine which crowned Mateschitz its 'Man
of the Year' in 2000: ‘At age 18, Mateschitz headed to
Vienna and spent the next 10 years happily bumming
around as a student. The essentials were sent from
home and he earned the luxuries himself: as a travel
guide, as a barman in Switzerland, as a steel-worker in
Sweden.’
The magazine afforded Mateschitz this accolade
because ‘he's a marketing wizard. He has taken a
product which is nothing special and made an
international success of it, through sheer strength of
brand image and clever marketing’.
At 28, Mateschitz got a job in marketing at Unilever
where he was responsible for Omo, Sunlight and Lux. It
was through his travels marketing toothpaste for
Blendax in 1982 that he came across a tonic that Thai
drivers used to stay alert at the wheel. He drank it to get
rid of his jetlag and, recognising its potential as an
energy-giving drink, he spent the next few years refining
the recipe. Today, Mateschitz owns 49% of the
business, with his Thai partner Chaleo Yoovidhya also
retaining 49%. The remaining stake is owned by another
Thai associate, Chalerm Yoovidhya.
Mateschitz wanted Kastner to help him with the
marketing strategy. A famously fraught few years
followed. Not only did the duo struggle to agree on a
slogan, but the product researched appallingly. Nobody
had ever encountered anything like it before. Or tasted
anything quite like it. When they did, many hated it.
Many focus group participants thought the tonic tasted
sickly sweet like liquid jelly babies or cough medicine.
And they thought it was substantially over-priced for its
slim can size.
Some were also put off by the strange-sounding
chemicals on the ingredients list, like taurine and
glucuronolactone. The rumour mill went ballistic. Was it
bad for children? Or an aphrodisiac? Or the equivalent
of 14 espressos? Was it really made of bulls' testicles?
But Mateschitz was convinced that if people
understood the product's functional benefits - that it
‘vitalises body and mind’ - they would buy it. He also
saw the merit in leveraging all the myths around the
brand to his advantage.
‘The rumours and confusion add to the brand. These
myths and word of mouth add up to something quite
close to a magical potion,’ explains Carsten Beers,
international account supervisor at Kastner & Partners.
The brand is still boosted by the air of mystique that
hangs over it today, aided by France's ongoing ban of
the product on the grounds that it is ‘harmful’. ‘This is
just the French protecting their own market and they
need an excuse, so they say they need more research
on taurine, a harmless acid. But it helps the rumour. Red
Bull gets smuggled into France from Switzerland and
Belgium’, says Beers.
Undeterred, Mateschitz launched Red Bull in Austria in
1987. Problem was, at that time there was very little
marketing budget because all the investment had gone
into production, research and gaining government
approval for the product from the health ministry. And
Mateschitz does not believe in borrowing money,
preferring to run his company via cashflow rather than
debt. Red Bull was forced into a grassroots strategy,
which has since become its trademark.
This approach is often credited as the main reason the
brand succeeded in creating the energy drinks market.
But The Henley Centre's Tamar Kasriel, head of
knowledge venturing, believes its fortune can be
attributed to more than just clever marketing: ‘Red Bull
©ulrichgrill.com
©Jürgen Skarwan
48 / 49
HANGAR-7 / SALZBURG, AUSTRIA 2005 /
HANGAR-7 / SALZBURG, AUSTRIA /
©Markus Leodolter
AIR RACE WORLD SERIES / NETHERLANDS 2005 /
"We have no real material assets,
our asset is the brand.” / Dietrich Mateschiz
©Szolt Szigetvary
CLIFF DIVING / AUSTRIA 2005 /
©Karoly Arvai
©Jürgen Skarwan
BUDAPEST 2005 /
MOUNTAINBIKE FREERIDE /
“TOGETHER” / GUNTHER EICHER / AUSTRIA 2002 /
case study / red bull /
has been very smart or very lucky, or both. Some of its
success is down to its first mover advantage and some
is because of the revolutionary, subversive edge given to
it by its early, grassroots marketing. Through both, it now
takes the lead on fuelling people's ability to have fun.’
Many blatant copycat rivals have crashed and burned
in Red Bull's wake. The aptly named Burn, owned by
Coca-Cola, fell flat when it tried to take on Red Bull in
the UK market in 2000.
Ex-Coca-Cola marketer Phil Roman, now chief
executive of agency Meerkat Culture, believes Red Bull
still has its stranglehold because no one has come up
with a better product yet. ‘All of them have dabbled and
struggled and finally failed to say “here's a clear
positioning of something that's different and here's
why”’, he says. ‘But Sprite 3G [Coke's latest energy
drink launch] will be interesting. It tastes good for a
start.’
But Red Bull has never been about the taste. Launch
marketing focused on sampling. The brand had to
persuade consumers to drink for a physical benefit,
rather than the taste. It enlisted an army of souped-up
super samplers, driving cars with giant Red Bull cans
mounted on their roofs. These teams policed the streets
targeting the tired outside gyms, university campuses
and offices.
©Sutton Motorsport Images
Red Bull was one of the first companies to realise the
power of student brand managers. Little encouragement
was needed for students to throw parties other than the
free cases of Red Bull, especially when they realised
what a potent mix Red Bull and vodka proved. The brand
manager role is an informal one, with students chosen
for their outgoing personalities. In return, Red Bull gives
them free drinks, covers the social costs incurred and
makes a modest contribution towards funding their
studies.
The brand has stuck to this grassroots strategy when
launching in new territories. After conquering the
Austrian market, Red Bull launched in Hungary and
Germany in 1992, before entering the UK in 1995 and
California, the first state in the US, in 1998. It is now
RED BULL FORMULA 1 /
present in over 100 countries.
That's not to say it does not do traditional marketing.
Red Bull executes a highly conservative, ‘problem and
solution Procter and Gamble style’, above the line
strategy, says Kastner. But the brand's playful cartoon
ads, which air globally, are more of an amusing aside to
complement the core events and sponsorship strategy.
As an adjunct they're often overlooked, which could
explain why some pundits applauded Red Bull's ‘stealth’
strategy on entering the US despite the fact it spent
$100m on traditional media.
As it becomes more mainstream, viral marketing is
becoming increasingly important. In the UK for the last
two years, for example, agency Blowfish has been
tasked to create parties that keep the brand on the right
side of cool. ‘Our brief was to do something quirky and
interesting and keep Red Bull alive in an underground
way,’ says Chris Pearce, managing partner at Blowfish.
Targeting ‘movers and shakers in key towns’, Blowfish
organised a series of secret parties. The most
fashionable haunts were targeted with flyers bearing the
headline 'Please keep on the grass', accompanied by a
blurry image of an armoured vehicle and a URL but no
Red Bull branding.
‘Red Bull wanted to do something that was an antidote
to the heavily branded and overt TV advertising targeting
the mainstream. This was about discovering something
for themselves,’ says Pearce. ‘Personal invites were
distributed and invitees were told by text where to meet.’
‘On the night we picked up about 400 people in buses
and transported them to the country. Everyone was
saying “what the hell are we doing?” They thought they
were being abducted when we took them on a 25
minute walk along a dirt track’, says Pearce. When they
reached the top of the hill, they looked down into the
illuminated valley to see bars, dance floors and the
armoured truck in the centre. Free Red Bull was
everywhere, but no banners or logos.
This is typical of the type of underground marketing
done by Red Bull around the globe. Pearce admits it's
incredibly difficult to measure the effectiveness of such
niche marketing. But as Kastner says, ‘making friends is
not about asking what you get out of something’.
Red Bull's Music Academy is another case in point.
‘We thought we should be present in music’, says
Kastner. ‘But we didn't want to sponsor a big contest.
We wanted to help young musicians improve their
talents.’ Founded in 1998 and headquartered in
different international cities each year, the Academy
selects DJs, singers, songwriters and producers to
spend two weeks with renowned musicians, to
exchange ideas, learn and network. During this time they
come face to face with their music heroes, from pirate
50 / 51
radio station operators to turntablists to ‘sonic theorists’.
Drummer Bernard Purdie, boogie pioneer Leroy
Burgess, mixer Bob Power and African jazz artist Hugh
Masekela have all been guest lecturers.
The Music Academy is supported by its more recent
ventures such as Artsehcro. Spelling orchestra
backwards, this initiative brings the DJ's turntable into
the classical music world. The brand also has what it
calls its own ‘web radio’. It consists of a library of new
music, which can be heard while accessing a photo
archive of Red Bull events.
Another fundamental part of Red Bull's strategy to
target opinion formers is extreme sports. As Soft Drinks
International magazine's features editor Annette
Sessions says: ‘Red Bull has become almost
synonymous with speed sports. Its many sponsorships
have given it a high profile in activities as diverse as
motor racing, bobsleds and aerobatic flying. Its
marketing strategy, including the sponsorship of such
action sports, must be working: the brand hasn't needed
to change direction in either its formula or packaging.
There have been no makeovers, no on-pack promotions,
no two for the price of ones etc, that are seen elsewhere
to regenerate and bring new life to brands.’
Indeed, the only product change the brand has made
since it launched is the introduction of a sugar-free
variant, which has boosted sales. Extreme sports suit
the brand because they accentuate the product
benefits; when athletes are pushed to the limits of their
endurance, whether they're base jumping, kayaking, free
skiing, mountain-biking or cliff diving, Red Bull is there
to stimulate body and mind.
The bolder the event, the better. Earlier this year Red
Bull held a ‘Big Wave’ surfing competition in Africa. ‘In
the end, the waves weren't big enough and the event
was cancelled, but Red Bull picked up plenty of
sympathetic media exposure in local sports journalists
and specialist international media,’ says Sessions. Also
this year, Red Bull held the first bobsled race, which
took place at Mount Hermon, Israel.
Red Bull is particularly fond of aligning itself with new
and gravity-defying sports. Two years ago it invented the
‘Air Race’, a World Series competition described as a
cross between aerobatic flying, auto racing and skiing
slalom. Pilots execute a series of mandatory high-speed
manoeuvres, withstanding G-forces up to 10 times their
body weight.
The brand is also keen to back promising athletes,
rather than the big names. It will often ask sports
champions who they believe to be the next generation of
winners, the idea being that Red Bull will help them
reach their potential. In total, Red Bull sponsors around
300 athletes.
‘Red Bull has sponsored so many of these sports
personalities that it has become ubiquitous. It's
everywhere you turn. Whether it's snowboarding,
skateboarding or BMX-ing, the place is saturated with
people drinking Red Bull. They’ve seeded it beautifully.
They've been particularly good at linking with high
profile, potentially dangerous events that have grabbed
attention, like speed skiing,’ says Matt Hales, planning
director at sports marketing agency Octagon.
One of Red Bull's most famous athletes is Austrian
base jumper Felix Baumgartner, who became the first
man to fly across the English channel without using an
aircraft in 2003. Instead, he was supported by a pair of
Red Bull branded, carbon fibre wings. On touchdown
his words could not have more ‘on brand’ had Red Bull
marketers chosen them. ‘It was total freedom,’ he said,
echoing Mateshitz's mantra that Red Bull gives people
the freedom to do what they want. Baumgartner's words
and pictures were then promptly beamed around the
globe and seen by over 200 million people (Selling
Power magazine, USA, September 2004).
More recently, Red Bull has moved into mainstream
events and sponsorships. Using the hook of extreme
sports, it launched the Taurus World Stunt Awards to
honour Hollywood stuntmen and women in front of a
star-studded audience on the Paramount Pictures lot.
As Mateschitz said at this year's gala ceremony: ‘Stunt
artists are the ultimate extreme athletes, so it seemed
only natural to create an event that would reward these
unsung heroes.’
Less predictable is Red Bull's move into traditional
sports like cricket, Formula 1 and particularly golf. Last
year it created the Red Bull Final 5 competition on the
European PGA Tour. As players dip in energy levels,
they are encouraged to drink Red Bull for the final five
holes.
However, Giles Morgan, managing director of Hill &
Knowlton's sports marketing and sponsorship division,
believes Red Bull is approaching these new markets in
a way that won't threaten its heartland youth positioning:
‘Rather than just slapping a label on an event, they've
gone down the route of describing the function and
benefit of what's in the can. They want to show that it's
not just beneficial for 17 to 25-year-olds or clubbers.
Grannies can drink it. And why wouldn't they?’
Red Bull's move into Formula 1 motor racing is as far
from logo slapping as is possible. By buying the old
Jaguar team at the end of 2004, the brand is really
putting its neck on the line; after all, it wouldn't look
good if a product that claims to enhance performance
trailed at the end of the grid, would it?
Hales believes it's too soon to judge how successful
this sponsorship will be. ‘The transition into the new
©Staudinger & Franke
52 / 53
MASTERS OF ORIGAMI / AUSTRIA 2005 /
team has been such a big job. Only next year will we
really see a Red-Bull-ified team. Then we'll see some
really creative uses of the team’, he says.
Already Red Bull has put its own spin on this traditional
marketing arena, by launching its own magazine to
accompany race days, called Bulletin. It contains all the
trackside gossip, from news about drivers' girlfriends to
Bernie Ecclestone's latest bugbear.
In August it threw a Star Wars themed event to
celebrate the formation of the new team during the
Monaco Grand Prix weekend and promote the release
of Episode III: Revenge of the Sith. Director George
Lucas schmoozed with the Stormtroopers and the
Formula 1 glitterati.
Although the Formula 1 deal gives Red Bull a bold
global positioning, some observers have questioned the
move and hinted that it is Mateschitz's personal affinity
to the sport that led to the decision to invest, rather than
sound marketing sense. Similar aspersions have been
cast in relation to Red Bull's aviation interests, such as
Hangar-7 (a huge glass hanger at Salzburg airport
which houses a collection of old aircrafts, the Flying
Bulls) and its restaurant Ikarus, which showcases
acclaimed chefs every month.
But as Giles Morgan says, in today's world obsessed
with return on investment and research panels
‘marketers can sometimes disappear up their own
marketing strategies’.
‘Marketers can be very pompous about CEOs creating
associations on a whim, or putting money into their
favourite pastimes. But why the hell not? In Red Bull's
case, that's very close to the idea of living your life how
you want to’, he adds.
Many marketers also lose confidence in their ideas if
they don't immediately produce a payback. This is
something that Mateschitz has never done. He
relentlessly persevered, even when the outlook was
bleak.
As Beers points out, many successful brand case
studies read like fairytales that follow a logical
progression to an inevitable, happy ending. ‘But just
because a brand gets to be successful doesn't mean
that it's logical. Often articles have a selective
perception of events. You read them and think “hey,
anyone can do it”. We should never forget that
Mateschitz had very hard times.’
The founder's passion and commitment runs through
the company DNA. Though this human touch will not
always be predictable, logical or rational, there's no
doubt that when the brand grabs the bull by the horns,
it's a force to be reckoned with.
CHALLENGE / FOUNDER DIETRICH MATESCHITZ
KNEW THERE WAS POTENTIAL IN THE ENERGYGIVING TONIC HE FIRST SPOTTED IN THAILAND
BEING GUZZLED BY TIRED TRUCK DRIVERS. HIS
BIG CHALLENGE WAS TO PERSUADE THE REST
OF THE WORLD TO CONSUME A SOFT DRINK FOR
ITS FUNCTION, RATHER THAN ITS TASTE. NO ONE
HAD ENCOUNTERED ANYTHING LIKE IT BEFORE.
FOCUS GROUPS THOUGHT IT TASTED HORRIBLE.
RUMOURS EMERGED THAT THE DRINK CONTAINED LIFE-THREATENING CHEMICALS, AND
PEOPLE THOUGHT IT WAS EXPENSIVE.
PROTRACTED DEVELOPMENT COSTS ATE INTO
RED BULL'S LAUNCH MARKETING BUDGET.
SOLUTION / BY TARGETING OPINION FORMERS
WITH GRASSROOTS MARKETING INITIATIVES, RED
BULL CREATED AN IMAGE AROUND THE BRAND
THAT MADE DRINKING IT SYMBOLISE FREEDOM,
AND LIVING LIFE TO THE MAX. IT HAS DONE THIS
BY BEFRIENDING PARTYING STUDENTS AND
EXTREME SPORTS ATHLETES THROUGH ITS MANY
QUIRKY EVENTS AND SPONSORSHIPS. THESE
PROPERTIES
ARE
HIGHLY
PR-FRIENDLY,
ATTRACTING SIGNIFICANT MEDIA EXPOSURE.
WHEREVER PEOPLE ARE IN NEED OF
STIMULATION FOR THE BODY AND MIND, RED
BULL IS THERE. THE STRATEGY CONTINUES
TODAY WITH A GROWING NUMBER OF OPINION
FORMERS DRINKING RED BULL, SUCH AS
CRICKETERS AND GOLFERS, AND TELLING THE
REST OF THE WORLD ABOUT IT. RED BULL'S
WEBSITE SERVES AS A PORTAL INTO THE
DIVERSE ARRAY OF ACTIVITIES ENDORSED BY
THE BRAND.
RESULTS / IN ALL NATIONAL MARKETS IN WHICH
RED BULL IS PRESENT, IT HOLDS AT LEAST A
70% SHARE. NO OTHER RIVAL HAS GOT CLOSE,
DESPITE THE CONSTANT ONSLAUGHT OF
LAUNCHES IN THE ENERGY DRINK SECTOR. IT
HAS MANAGED TO DO THIS WITHOUT THE
NEED TO DISCOUNT ITS PRODUCT OR REVAMP
ITS IMAGE.
IN 2004 RED BULL SOLD 1.935 BILLION CANS.
COMPANY SALES ROSE BY 32.3% FROM 1.261
BILLION EUROS TO 1.668 BILLION EUROS. SALES
ARE UP 50% IN THE USA, 43% IN THE MIDDLE
EAST, 40% IN AUSTRALIA AND 30% IN EASTERN
EUROPE. FOR MANY, RED BULL'S SLIMLINE CAN
CHARACTERISES ENERGY DRINKS AND HAS
BECOME AS ICONIC AS THE COCA-COLA
BOTTLE. IN FACT, ACCORDING TO BEVERAGE
DIGEST, RED BULL NOW OUTSELLS COKE AND
PEPSI IN AMERICAN CONVENIENCE STORES.
case study / red bull /
ANALYST’S INSIGHT / By John Band /
Consumer Markets Analyst at Datamonitor
If you're planning to launch a new product into the overcrowded soft drinks market, you've got two options.
Either start with a small-scale launch, with a possible
roll-out to other regions if everything goes well (maybe if
this is successful, you'll eventually roll the brand out
nationwide or internationally). Or go for a huge, all-gunsblazing global launch, supported by vast amounts of
above- and below-the-line marketing.
The first approach is popular among low-cash start-ups,
the second among drinks giants - Innocent smoothies
and lemon-and-lime Diet Coke are good examples. But
what about a huge global launch over a short time period without significant input or support from any of the
established multinational drinks companies? What
about doing this initially with no above-the-line marketing support at all?
Red Bull is not an example that drinks marketers ought
to follow slavishly: Dietrich Mateschitz's roll-out plan was
so bold that, but for the fact he owned the company, no
CEO would ever have greenlighted it. The success of
this strategy owes a great deal to being in the right place
at the right time, as clubbers tired of beer and alcopops
while extreme sports took off worldwide.
Nonetheless, Red Bull's launch was clear evidence that
viral and word-of-mouth marketing is now the most
important advertising medium for new product launches,
utterly eclipsing the traditional 30-second TV spot.
Consumers are so jaded and immune to conventional ad
claims that if you want them to trust a new brand, you
need to go for their friends and their idols. Above-theline media still have a role, but this role is to maintain
interest in existing brands and to support below-the-line
campaigns.
www.datamonitor.com
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GERMANY
AD SPEND EURO BY ADVERTISING + COUNTRY
APRIL 2005 - JUNE 2005
3,000
2,700
2,400
2,100
1,800
1,500
1,200
0,900
0,600
0,300
0,000
TELEVISION
UK
D
F
Source: www.xtremedigest.com
CHE PAN
MAGAZINE
EUROPE
54 / 55
CREDIBILITY / Copycat rivals have
crashed and burned in Red Bull's wake.
It has retained its stranglehold on the
energy drinks category because of a
clear and consistent positioning, free of
the usual retail gimmicks and packaging
redesigns: the product genuinely does
deliver on its claim to 'vitalise body and
mind'.
©Jürgen Skarwan
EVENTS / BUZZ / Red Bull sees event
marketing as an antidote to heavily
branded mainstream advertising. This
chimes with the brand's 'making friends,
not buying people' positioning. Activities
range from secret parties that keep a
subversive brand on the right side of
cool to PR-friendly Air Races and the
famous Flugtag, watched by up to 50,000
spectators in one go. Red Bull's appeal
has grown by targeting opinion formers,
who drive sales through word of mouth.
©DanielGrund.com
PONSORSHIP / CULTURE / Red Bull's
usic Academy helps young DJs,
ngers, songwriters and producers
arn from renowned musicians. Its
aurus World Stunt Awards honour
ollywood stuntmen. The brand also
uns its own 'web radio' - a library of
ew music, accompanied by a photo
rchive of Red Bull events. Its ties to
viation are symbolised by Hangar-7 at
alzburg airport, which houses a
ollection of old aircraft, and a
estaurant, Ikarus, which showcases
cclaimed chefs.
GRASSROOTS MARKETING / Wh
Red Bull launched in 1987, the marketi
budget had largely been eaten up by t
new product's development cos
Reluctant to run the company on de
founder Dietrich Mateschitz a
advertising partner Johannes Kastn
opted for a grassroots strategy, whi
has become the brand's trademark. R
Bull is a rare drink, sold on physi
benefit rather than taste. Hence t
inaugural army of street sampler
targeting the tired outside gym
university campuses and offices.
©DanielGrund.com
©ulrichgrill.com
HERITAGE / Most of the world's iconic
brands are rooted in a good story. Red
Bull's humble origins as an obscure oriental stimulant sparked a rags-to-riches
tale rooted in the power of effective marketing. The myths surrounding the
drink's strange-sounding chemicals - an
aphrodisiac? The equivalent of 14
espressos? Made of bulls' testicles? add
up to something close to a magical
potion.
©Ian Hylands
RED BULL / BRAND MAP/
SPONSORSHIP / SPORTS / Red Bul
synonymous with speed sports a
gravity-defying stunts. The bra
sponsors 300 athletes, many of wh
are up-and-coming rather than big na
stars - the idea being that Red Bull
help them reach their potential.
Extreme sports suit the brand beca
they accentuate the product benef
when athletes are pushed to the limits
endurance, Red Bull stimulates body a
mind. Red Bull has also infiltra
traditional sports like cricket and g
and now runs its own Formula 1 team