Red Bull Marketing Plan
How Red Bull woke up the teen market It looks (and tastes) like medicine, but it still conquered the soft drinks trade. Now the edgy pick-me-up is moving into the grown-up world of motor racing. John Arlidge reports reddit this John Arlidge The Observer, Sunday 5 December 2004 Article history At this time of year fallen leaves shroud the carefully planned suburbs of Milton Keynes. Mist drifts in from the fields. The posh car firms – Mercedes, Volkswagen, Audi – whose UK head offices ring the Buckinghamshire town are gearing down for the winter.
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But last week the end-of-year gloom was lifted by the arrival of a most unlikely new inhabitant. A bronzed and energetic Austrian, who has made a billion-pound fortune selling a drink that looks and tastes like medicine has just become the town’s biggest private investor. Dietrich Mateschitz, 60, the owner of Red Bull, spent more than ? 60m buying up the Jaguar Formula One racing team. The thundering bull logo and ‘Red Bull gives you wings’ advertising slogan will replace the Jaguar logo on the wings of the silver F1 cars next year.
In a sport dominated by tobacco giants, banks and telecom multinationals, the arrival of the Austrian health entrepreneur has raised eyebrows. From Suzuka to Silverstone, everyone is gossiping about Herr Bull. How has he transformed a slim blue-and-silver can into a 200mph silver arrow? Is a mix of taurine, detoxicants, caffeine, sugar and vitamins any match for petrol? What makes Red Bull run and run? The sugary drink was launched in the UK a decade ago. At that time no one had heard of an ‘energy drink’ and most people assumed Red Bull was a brand of Austrian lager.
What has happened since has written a new chapter in drinks and marketing history and might be about to give F1 a much-need image boost. Red Bull’s journey to Milton Keynes started with toothpaste. Mateschitz worked in Bangkok, where he was international marketing director for Blendex, a German toothpaste-maker that is now part of Procter & Gamble. A Thai colleague, Chaleo Yoovidhya, sold a local tonic syrup called Krating Daeng – ‘Red Bull’. Mateschitz tried it and was hooked. ‘It cured my jet lag in seconds,’ the reclusive billionaire recalls.
The idea of marketing it in Europe came to him when he read in a magazine that Taisho Pharmaceuticals, a producer of tonic drinks, was Japan’s biggest corporate taxpayer. In the 1980s he quit his job and set up a company with Yoovidhya. They played around with the drink’s formula, translated the name into English and applied for a licence to sell the brew in Germany and Austria. Early taste tests were discouraging. ‘Most people said it was disgusting and created a sticky mouth,’ one former employee recalls. Bars initially refused to stock it, seeing it as a medicinal or health-related product, rather than a mixer.
But Mateschitz was convinced that it would be a hit with core youth groups. He guessed – correctly – that some clubbers wanted to dance all night without taking illegal drugs, such as ecstasy, and skiers and snow-boarders would enjoy enhanced performance, while hot bars would become even hotter when drinkers woke up to Red Bull as a vodka mixer. To create a youth-oriented ‘underground’ feel for Red Bull, Mateschitz deliberately restricted supply and refused to advertise. He pioneered the now commonplace practice of ‘viral’ marketing – paying students, DJs and young opinion formers to host parties where the drink was served.
The young of Austria caught the bug and, by the time the drink was launched in Germany in the early 1990s, it was so popular it sold out within days. France and Norwway helped to bolster the drink’s edgy image when they banned it on health grounds, following claims that too much caffeine could be damaging. When the drink was launched in Britain nine years ago, backed by whimsical TV advertisements claiming ‘Red Bull gives you wings’, this country soon became the drink’s number one market. Today, like alcopops 15 years ago, Red Bull has created a whole new drinks category.
The health and energy drinks market is the fastest-growing sector of the burgeoning soft drinks market, doubling in size every year to reach ? 1. 5bn last year. Red Bull is the market leader and its revenues rose 10 per cent to ? 1bn last year, on sales of 1. 5bn cans. Vodka and Red Bull is still the most popular alcoholic drink for under-20s. The pick-me-up’s ‘anti-brand brand’ status explains its rapid success, argues Nirmalya Kumar, senior analyst at the London Business School. ‘Red Bull has never done anything in a conventional way. It has not used normal advertising, nor marketing.
When it sponsors events or sports, it tends to go for minority ones. ‘ While the no-logo generation is happy, the premium price on cans – more than ? 1, compared with 50p for Coke or Pepsi – has kept the money flowing in to the firm’s Alpine HQ. But what is an irreverent Austrian doing in one of Britain’s newest towns and why is he spending a fortune buying his way into a big-brand sport in crisis? Frustrated by the dominance of business interests over sport and the continued dominance of Ferrari, some of the big F1 teams are threatening to leave the F1 circus and form a new competition.
Some observers say Red Bull is keeping pace with its core market as it gets older. ‘Formula One has the kind of dangerous, edgy, masculine image that suits Red Bull,’ says Richard Hall, chairman of the drinks consultancy Zenith International. ‘The early adopters who made it what it is and who are still a huge market do not go to clubs any more. They stay at home and watch TV on Sunday, so F1 is the perfect vehicle to reach them. ‘ Others take a broader view. ‘Red Bull is edgy and unpredictable – two qualities sorely lacking in modern day Formula One,’ says Sean Pillot de Chenecey, a youth marketing analyst who has worked for Pepsi.
Can the mighty energy drink revive both itself and motor sport? For the past 10 years, Mateschitz has boosted sports ranging from wind-surfing to hang-gliding, but he will need all the verve that young partygoers seek from Red Bull if he is to transform F1. Whatever his motives for moving to grey, cold Milton Keynes last week, few would bet against a man who has taken a bubble-gum-flavoured caffeine drink and made it more profitable than Coca-Cola. ???? :http://www. guardian. co. uk/media/2004/dec/05/advertising. formulaone A Bull’s Market – the marketing of Red Bull energy drink
Red Bull, Austria’s biggest export since Arnold Schwarzenegger, has methodically created and dominated the energy drink category much in the way players of the board game Risk would defeat their opponents. Dietrich Mateschitz, the owner of Red Bull International, created the highly caffeinated beverage in 1987. Five years later, the drink spread into neighboring countries like Hungary and Slovenia, followed by Germany and Switzerland. In 1997, Red Bull prepared to storm the U. S. market. Today, the slinky 8-3-OZ can has completed its invasion into nearly every cold box in the United States. Ohio, Tennessee and the Dakotas are among the few states without it. ) In less than three years, Red Bull singlehandedly established and then lifted the booming energy drink category from a base of $12 million in (wholesale) dollar sales to $42 million in 1998 and $75 million in 1999, per Beverage Marketing Corp. Others soon followed, building energy drinks to a $130 million business. Now Coke (KMX) and Anheuser-Busch (180) are jumping in. Last year, Red Bull’s market share stood at 65%, while the company reportedly pulled in a cool $1 billion in worldwide sales.
Just how Red Bull managed to accomplish so much, so quickly has become the stuff of mythology Some have written off the product by calling it a “flash in the pan” or derisively note that its handlers “got lucky”. A closer investigation of the company’s strategy however, reveals that luck had little to do with Red Bull’s success. The company’s consistent battle plan has been to “open up” a market by securing unusual distribution. When Red Bull initially set up camp in Santa Monica, Calif. , it piggybacked on established distributors.
Typically distributors will deliver a number of brands; a Pepsi house will handle Pepsi, Diet Pepsi and Mountain Dew, and may even pick up a non-competing rival like Dr Pepper. Sales reps even greased the wheels by paying for their accounts’ promotional, advertising and sampling costs for three months. But as the drink caught on, the company began taking a more narrow approach. Now, a Red Bull sales rep will contact a small distributor and insist that he or she sell only Red Bull. Otherwise, Red Bull will set up a warehouse and hire kids to load up the vans and deliver product.
These start-up distributors can focus their entire energies on getting Red Bull fully stocked in stores with prominent shelf placement. They generally break even within three months and are profitable within six. “They buy direct from Red Bull. There’s enough margin and volume to make it work,” said one Northeastern distributor. “I wish they’d give it to me, but they have the kids with the vans doing it. I’m looking forward to getting Snapple’s Venom [a new energy drink launching June 15] so I can compete with them. ” Next, the sales team visits key on-premise accounts: hot clubs and trendy bars.
When owners begin buying a few cases, they receive a Red Bull branded cooler and other POP items. “That’s when we start doing business officially,” said Markus Pichler, evp-strategic planning, Red Bull North America. “We go to on-premise accounts [vs. retailers] first, because the product gets a lot of visibility and attention. It goes faster to deal with individual accounts, not big chains and their authorization process. ” Plus, on-premise provides fertile ground for new drink trends. “In clubs, people are open to new things,” said Pichler. The most important thing about [Red Bull] is, it’s working. If you had a tough week and want to dance, the product works. ” Perhaps a bit too well. Fueling Red Bull’s growth is a mystique created by outlandish rumors about its contents: it is “liquid Viagra”; its secret ingredient is bull’s testicles; someone overdosed from the drink because it has drugs in it. (The company shoots down these and other myths in an FAQ section on RedBull. com. ) Pichler wouldn’t talk about Red Bull’s natural fit with the “speed” crowd that frequents raves, taking designer drugs to stay awake for days at a time.
Nor does the company endorse the mixing of Red Bull with vodka, Jagermeister or tequila-a ubiquitous bar call whose roots can be traced to Europe. “From a sales perspective,” Pichler acknowledged, “[the mixability] is a nice side effect. ” There’s more to the guerrilla strategy than building buzz at clubs. Sales teams will open off-premise accounts at convenience stores near colleges, gyms, health-food stores and supermarkets. The company has divided the U. S. into eight decentralized sales units, each of which is handled on a city-by-city basis.
One regional office in New York, for example, services Maryland, New Jersey Pennsylvania and Virginia. The Boston office handles the New England states and upstate New York. Each unit is responsible for creating distribution, making sales calls and developing targeted marketing plans. The mission: to find out where the target demo (men and women age 16-29) hangs out and what interests them. It’s their job to get the message out to the right clubs and at the right events. While Red Bull relies heavily on bars and night clubs for its sampling events, alternative sports have also proven to be a successful product-trial arena.
The company underwrites a number of extreme sports competitions and sponsors about three dozen alterna-athletes. Events include the Red Bull Huckfest, a ski and snowboard freestyle competition held in January in Snowbird, Utah; and the Red Bull “Flugtag” (German for flying day),premiering in the U. S. this fall. At the latter event, amateur pilots will create exotic flying machines and attempt to soar off the Santa Monica pier. The brand also employs teams of “consumer educators,” who roam the streets and dangle free samples.
With California as its stronghold, Red Bull made its way into Oregon, Settle, Texas and ski resorts in Colorado. It next moved into the Midwest, targeting urban markets like Chicago and its environs. Soon it showed up on the East Coast in Miami and New York. (The Big Apple had a head start: Europe leaked the beverage into the city) Newer markets include the Carolinas, Virginia and Washington, D. C. In the antithesis of any major’s marketing plan, Red Bull buys traditional advertising last. Only when a market is deemed mature does the company begin a media push.
The idea is to reinforce, not introduce, the brand. “Media is not a tool that we use to establish the market,” said vp-marketing David Rohdy. “It is a critical part. It’s just later in the development. ” Current ads, titled “Red Bull gives you wings,” focus around an animated bull character. The initial spot is set in the Renaissance era, where an artist is telling the man who commissioned his painting that he has created the perfect piece of art: Red Bull. “It’ll give you wings,” he said. Indeed, in another ad, an energized bull is shown leaping over a city.
The ads have begun airing during late-night TV in New York, and radio programs including The Howard Stern Show. A Santa Monica-based shop, Lunch, handles ads and POP materials for the entire U. S. Red Bull typically creates two new TV spots a year and runs them in mature markets. The brand spent $100 million in the U. S. last year, according to the company Measured media spending was only $18. 9 million last year, up from $9 million in 1999, per Competitive Media Reporting. Red Bull’s runaway popularity had given it easy entree into mass merchandisers. It is currently the No. product in Store24, where it is now a bigger seller than beer, milk, water and soda. 7-Eleven is experiencing similar results. “We have seen double-digit growth [in the non-carbonated segment]. Red Bull tops the list big time,” said Jim Jackson, category manager for non-carbonated beverages at 7-Eleven, Dallas. ” [Their success is due to] their single-product focus, major advertising dollars and distribution. They create demand before they even get it to retail. ” The picture may yet change, as Red Bull is now facing more than a dozen imitators, most notably Coke’s KMX and A-B’s 180.
Knockoffs they may be, but distributors say they have been moving extremely well. “We’ve done a lot of the dirty work for them,” Rohdy said. Pichler was a bit more engaging. “We’re a fan of competition. It’s a positive for us,” he said. “It validates the energy drink category. ” Red Bull has already experienced the copycat phenomenon overseas. The company doesn’t appear to be concerned, however, having hit the $1 billion worldwide sales mark. Besides, observers have said the also-rans don’t have a prayer. “Red Bull seems to have a cooler in every bar in every city.
The sales force, that’s all they do,” said one new age beverage executive. “The big guys will not put that much energy into it and will lose interest when they don’t make any headway. ” After conquering the U. S. , the Red Bull army plans to move on. It is currently making headway in Brazil and South Africa, though South America and Africa as a whole remain largely untapped. If history repeats itself, it won’t be long before everyone on the planet gets their “wings. ” ???? : http://findarticles. com/p/articles/mi_m0BDW/is_22_42/ai_75286777/? ag=content;col1 It’s a (Red) Bull Market After All During the height of dotcom mania — a dimly remembered time of roll-away office cots and 10 PM conference calls — Red Bull energy drink became the fuel of choice at West Coast kitchenettes, predawn dance parties, and Kozmo. com checkout lines. Three years and one stunning economic downturn later, office fridges are bare of complimentary beverages, and 22-year-old consumers can hardly afford resume paper much less a caffeinated kick in the pants — especially one that costs $1. 99 for just 8. 3 ounces.
So how is Red Bull marketing its brand to meet the changing needs and budgets of its customers? How will the privately owned Austrian company expand its product line beyond the silver-bullet beverage that “gives you wings”? The short answer: It’s not. And, quite frankly, it doesn’t need to. Not yet, anyway. Red’s Dawn: The Birth of a Bold Brand Red Bull founder Dietrich Mateschitz introduced his taurine-fueled beverage to Europe in 1987. (Coincidentally, it was the same year Howard Schultz acquired a small, Seattle-based coffee outfit called Starbucks Corp. Ten years later, Red Bull charged into the United States, launching a new category of nonsoda energy drinks aimed at burned-out high-school and college students. Remarkably, America’s hottest new brand bucked the trend of aggressive, excessive marketing that swept through upstart companies in the late 1990s. While Pets. com and eToys were lavishing millions on prime-time advertising, Red Bull was quietly converting America’s youth into devoted, enthusiastic customers. Since its inception, Red Bull has shunned print advertising in its marketing strategy.
It has not created one Web-marketing campaign. And it hasn’t tweaked or expanded its product line one iota. Red Bull has, however, expanded into 50 countries, experienced annual double-digit growth, and captured the loyalty of a notoriously fickle consumer group: teenagers. Today, a dozen imitators like Whoop Ass and Red Devil vie for the number-two high-voltage beverage spot, and Mateschitz is the richest man in Austria. So what gives? How did Red Bull come to dominate the energy-drink market through stealth and thrift? How did it become the coolest brand since Slim Shady without a branding blowout? In terms of attracting new customers and enhancing consumer loyalty, Red Bull has a more effective branding campaign than Coke or Pepsi,” says Nancy F. Koehn, professor of business administration at Harvard Business School and author of Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell (Harvard Business School Press, 2001). “Red Bull is building a beverage brand without relying on the essential equipment of a mass-marketing campaign. Perhaps the indispensable tools of marketing aren’t so indispensable after all. “
Here are some tools that Red Bull doesn’t use: billboards, banner ads, taxicab holograms, blimps, Super Bowl spots. Even its TV spots — all of which feature the whimsical sketches of a mysterious Austrian artist — serve more to amuse than to educate or entice consumers. Bull Shift: Marketing Makes a “You Turn” Like its product, Red Bull’s branding campaign is sleek and small. Its grassroots efforts fly well beneath the radar, and they provide a startling return on investment. In fact, its most lucrative strategies cost next to nothing. Grassroots marketing is enjoying a resurgence with Starbucks, Red Bull, Krispy Kreme, and Trader Joe’s — young, successful brands built by word of mouth,” Koehn says. “Person-to-person marketing is going to be a big part of the next chapter, the next frontier of branding competition. ” The sudden shift from TV blitzes and blimps to low-key, low-cost marketing schemes, says Koehn, follows the convergence of three trends. First, advanced communications technology is creating a generation of consumers skeptical of every TV ad, email message, and celebrity endorsement.
If a marketing message doesn’t offer a distinct, unique benefit to the individual consumer, he or she will tune it out, Koehn says. “As information overload becomes a time-management issue for consumers, mass marketing is necessarily going to be less effective. ” Second, people are casting votes with their credit cards. “People are using products to provide things that they think traditional institutions no longer can, like social progress, a sense of community, and a sense of public good,” she says. “Companies that want to claim consumers’ votes will have to implement branding strategies that represent something. Finally, Koehn says that consumers are looking for authenticity, self-identity, and community in the brands they endorse. And for Red Bull’s target audience, being authentic means being a bit irreverent, a bit antiestablishment, and every bit different from your parents, says Marc Gobe, president and CEO of the desgrippes gobe group, a New York-based branding firm with a client list that includes Godiva, Versace, and Starbucks. “The beauty of Red Bull is that it’s the antibrand brand,” says Gobe, author of Emotional Branding: The New Paradigm for Connecting Brands to People (Allworth Press, 2001). Red Bull doesn’t have any of the commercial trappings of a traditional, off-the-shelf product. It’s underground, even when it’s above ground, and that appeals to the young people who drink it. ” Running of the Bull: How the Brand Got Hot Red Bull sets its grassroots ethic into motion with a simple, yet masterful marketing force: student brand managers. In Europe, collegiate buzz junkies have been successfully addicting friends and classmates for years thanks to a foolproof branding plan: Red Bull provides the student representatives with free cases of its energy drink and then encourages the kids to throw a party. Needless to say, it didn’t take long for coeds to discover the benefits of Red Bull and vodka, now a staple at hip bars around the globe. ) Hardly a new marketing device, these brand evangelists spread the good word about Red Bull quickly and cheaply. Above all, Gobe says, the student advocates offer credibility to a product that is competing in an increasingly crowded beverage market — a market that became even more competitive in August when PepsiCo was given the FTC’s okay for its plan to purchase Quaker Oats and take control of the Gatorade brand. Generation Y no longer responds to commercial messages from big-business America,” Gobe says. “Cool college students have become Red Bull’s best ambassadors because they carry the most credibility with cynical consumers. It’s almost as if brands have to be elected to be part of the culture now. ” Red Bull’s second grassroots branding strategy involves “consumer educators” — folks who drive around in shiny silver off-roaders with giant, phallic cans of Red Bull strapped to the back. Their mission: to find people who need energy and give ’em a free can of Red Bull.
Sounds too corny and pedestrian to actually work, right?! Wrong. This ploy, as old as Heinz and Tupperware, is introducing Red Bull to the masses — building an image for next to nothing. On the other hand, the free sporting events that Red Bull organizes do not aim to influence the public at all. Many of Red Bull’s extreme events — cliff diving in Hawaii and skateboarding in San Francisco — are for athletes only, designed “to support a community of athletes and to bring credibility to the sports they compete in,” says Emmy Cortes, director of communications for Red Bull.
Can It: Packaging Becomes Paramount It’s all in the can. Gobe says that the sleek, silver can is Red Bull’s “anti-Pepsi statement. ” He calls it slim, sexy, and powerful, and says that its diminutive size only bolsters Red Bull’s reputation as a concentrated experience. “Packaging is critical,” Koehn agrees. “Red Bull really looks like a product from a global economy. It doesn’t look like a traditional American soft drink — it’s not in a 12-ounce can, it’s not sold in a bottle, and it doesn’t have script lettering like Pepsi or Coke. It looks European.
That matters. ” The most remarkable thing about Red Bull’s 8. 3-ounce can is not its size or sex appeal but the fact that it’s the company’s only offering. One size. One color. One sticky, sweet taste. That’s all, folks. At a time when Starbucks is hawking ice cream, bottled Frappuccino, and airplane coffee, it’s shocking to hear of a successful company not exploring brand extensions left and right. “We are one of few companies around the world that can stay focused on one product,” Cortes says in defense of Red Bull’s narrow strategy. “We do what we do best. “
A private company with a hands-off founder, Red Bull doesn’t feel financial pressure from investors and board members. It can take its time with the brand, and Koehn says that it should. “Red Bull is establishing itself as a very powerful mover in a relatively new and evolving category,” she says. “To do that, they are trying to get their knitting exactly right before they start weaving. ” But if Red Bull continues to amass consumers and increase its profits every year, Koehn predicts that the company will introduce related products “carefully, tightly linked to Red Bull’s core offering. In the meantime, Red Bull is simply working to keep tabs on all the rumors circulating about its beverage. Some reports claim that Red Bull is unsafe for minors. Others link the drink to the deaths of various teenagers around the world. France has banned the sale of Red Bull altogether. Consumers don’t appear concerned. In clubs and dorm rooms everywhere, Red Bull remains a popular drink among popular kids. Gobe says that the rumors only contribute to the brand’s mystique. “Red Bull is not about safety,” he says. “The brand’s emotion is over the edge; it’s pushing the envelope.
Danger is part of the deal. If you can survive Red Bull, you are cool. ” The question, however, is not whether consumers can survive Red Bull but whether the major soda manufacturers can. Regardless of whether the Austrian beverage disappears in five years or steals the market out from under Gatorade, Red Bull has tapped into an authentic branding strategy that will redefine product marketing in the next decade — again. “The game of marketing sports drinks is going to be the game of connecting with people in certain kinds of contexts,” Koehn says. Pepsi’s not going to be able to market Gatorade strictly with slick print campaigns and good television. Pepsi and Coca-Cola could learn a lot from Red Bull. ” Anni Layne Rodgers ([email protected]. com) is the Fast Company senior Web editor. Learn more about Red Bull on the Web. Redbull Marketing Strategy Some observers say that Red Bull’s branding is revolutionary, calling it an ‘anti-brand’ strategy. The company faced additional problems in Pakistan where there were already many established drinks available. The firm avoided usual methods of marketing, relying more on what is called ‘buzz marketing’ or word-of-mouth.
A brand image was created and cultivated which associated the drink with youth culture and extreme and adventure-related sports, such as motor sports, mountain biking, snowboarding and dance music parties. In other countries Red Bull’s target consumer segment began to adopt nicknames for the product such as ‘liquid cocaine’ or ‘speed in a can’, thus spreading its ‘left-field’ appeal. Red Bull then worked to ensure that their brand was visible on the street: * Using pick-up trucks as mobile displays, painted blue and silver with a giant can of the drink mounted on top of the vehicle. Designed to be eye-catching, these devices were aimed at promoting the red bull brand as youthful and slightly ‘off-the-wall’. * Cans of the drink were also given out free to people on the street who had been identified as being in need of energy. * Red Bull was given to club DJs, empty cans would also be left on tables in hot spots such as trendy bars, clubs and pubs. The company also set about promoting the Red Bull brand directly to Generation Y, the so-called ‘millennial’: people born after 1981 who were believed to be cynical of traditional marketing strategies.
Part of this idea involved recruiting ‘student brand managers’ who would be used to promote Red Bull on university campuses. These students would be encouraged to throw parties (as if encouragement was needed! ) at which cases of Red Bull would be distributed. The brand managers would then report back to the company, giving the firm a low cost form of market research data. The use of this kind of marketing strategy has become known as ‘viral’ marketing. It is as if a company sees no need for traditional informative or persuasive communications, rather in Red Bull’s case it used the youth ‘underground’ to spread the popularity of the drink.
So the firm would rather restrict the drink’s supply and not advertise it, expecting that growing numbers of target consumers ‘catch the bug’ and its reputation spreads. Red Bull was a spectacularly successful example of the strategy working even though as we see later, its branding was aided by state intervention in countries like France and Denmark. By 2004, the worldwide energy drinks market was worth an estimated ? 1. 6 billion; Red Bull had achieved a clear market leading position, with a 70% market share.
The lure of fast-growing profits in this market brought many competitors into the functional foods sector, where health and energy drinks have seen sales double every year since their introduction. Many competitors have tried to employ similar marketing strategies and tactics in order to grab sales from the market leader. Not all have been successful, of course. When a firm tried to launch its own energy drink in 2002, it tried to target 16-24 year olds with a poster campaign featuring barely clothed young people exhibiting wounds to their bodies. As the drink was called ‘Shark’, the relevance of the injuries seemed clear.
However, following complaints, the Advertising Standards Authority (ASA) banned the posters, as the campaign appeared to endorse sexual violence. More on this decision can be found on the ASA Web site. The problem that Red Bull now faces is how to build on its incredible sales growth, as it has become a mature brand within a saturated market. Among the challenges that Red Bull faces, the following are some of the most serious: * The loss of its original consumer base, as the ‘millennial’ become working adults. How should the firm attract a new group of 16 year old consumers? Health concerns that have emerged in several countries over problems associated with high intake of caffeine. Red Bull was banned in France and Denmark following the publication of these concerns. It is classified as a medicine in Norway and until recently could only be bought in pharmacies in Japan. As the health and energy soft drinks market has reached maturity, Red Bull is concerned that it is unable to target mass consumption in these countries. * Being over-reliant on a single brand. Until 2003, the company only produced one version of Red Bull. A sugar-free version was introduced in that year. The mature market for energy drinks has attracted some of the global firms, such as Coca Cola, Pepsi as well as Asda/Wal-Mart, with their own brands seeking to gain a competitive advantage over the market leader. Red Bull: Where marketing goes into overdrive Visitors to Red Bull’s Austrian headquarters are liable to get lost. The verges of the narrow road winding into the hills east of Salzburg bear no signposts. Miles of unbroken meadow and yellowing thickets pass without a hint of the silver and blue insignia that wraps itself round the company’s eponymous energy drinks.
Even when I arrive at the volcano-shaped building that houses Red Bull’s 350 head office staff, there are no obvious indicators to back up the satnav’s monotone insistence that we have “reached our destination”. Until I walk in and see a Formula One racing car parked in the atrium, it is hard to be certain I’m at the right place. For a brand that has flourished on having a highly visible marketing strategy, this seems odd. Not so, says the lady showing me round the headquarters. She says the absence of signposts is deliberate, so that when people think about Red Bull it is about the athletes and the events, not the offices.
This accords with the philosophy woven into Red Bull by Dietrich Mateschitz, who co-founded it in 1984 and remains its largest shareholder. “Our media philosophy is as simple as it is correct: the onus is on the media to create content, not on us to provide it. If our results, achievements and activities are worth reporting, you will read about them,” he says. “We disagree with the philosophy of many others who abuse the media for personal gain. Imagine if you removed everything from the papers that was announced but never came to fruition or took place or that later proved to be inaccurate. For the most part, the group has done well at providing the media with activities to report on. So much so, in fact, that when people say Red Bull, it is hard to know if they are referring to the drink, the world championship-winning F1 team, the company’s spectacularly dangerous-looking air-racing series, or the rash of other extreme sports events to which it lends its name. In spite of the energy invested in its marketing campaign, Mr Mateschitz says the quality of the drink is still the most important factor in Red Bull’s success. The best marketing strategy and the highest marketing budget in the world cannot win back a disappointed consumer. Long-term success is based on product quality and repurchase rate,” he explains. The inspiration to launch the company came to Mr Mateschitz during his tenure as international marketing director for Blendax, a toothpaste maker now owned by Procter & Gamble. Travelling in Thailand, he quickly saw a gap in the European market for a modified version of energy drinks widely consumed in the country.
In the 27 years since then, Red Bull’s association with adrenalin-fuelled sports has created a wave of brand goodwill that has helped it become the world’s most consumed energy drink, selling more than 4bn cans last year, and one of Austria’s biggest corporate success stories. This global reach also means it has, so far at least, weathered the fall in consumer spending in western economies. During 2010, the privately held company saw sales in Brazil grow by 32 per cent, while Turkish and Japanese consumers increased their intake by more than 80 per cent. Overall, the group posted sales last year of €3. 78bn ($5. 7bn), compared with €3. 26bn a year earlier. In spite of its size, however, the group is still steeped in the sort of folklore and philosophical quackery that most large multinationals eschew in favour of efficiency of production. In one example of the group’s unusual approach to mass production, the caps on its bottled mineral water can be sealed only on nights when the moon is full in the sky. This is the kind of behaviour that could infuriate shareholders of a publicly listed company. Mr Mateschitz is unambiguous about the likelihood of Red Bull appearing on the stock market in the future, however. Never. Thanks to our financial philosophy, we are not and never have been in need of additional capital, nor does anybody want to cash in. If we were to go public, the company would lose all of its benefits and in turn we would be left with numerous disadvantages,” he says. Branded Video Content Helps Red Bull Find Its Marketing Wings Red Bull is a pretty clever company when it comes to promoting itself. Who here has never, ever had a Red Bull product? OK, who here has never been to an event that was at least partly sponsored by Red Bull? How about seen an athlete that is sponsored by them?
If you raised your hand for one or all of those questions, you need to get out more. Now, Red Bull is turning its attention to branded video content, which it’s, dare I say…. feeling bullish about? Brand marketers can certainly learn a thing or two from Red Bull’s approach to branded content. Let the video be what it is: interesting, compelling, and specifically fit to their brand in one way or another. They’ve been doing some very interesting stuff in the space. In fact, you might have actually seen some of their videos and not even realized that they were actually done by Red Bull.
Here are a few examples: Did you see the Red Bull in that one? A logo on a shirt, hat and backpack, oh and a shot of him drinking a can for a split second. This one is a bit more blatant in that their logos are all over the place, but again, it’s not about the product really but about aligning it with athletes and personalities to kick that “me too” need to connect and fit in instinct in humans… their customers. Here’s a brand new one they just posted about an hour ago while I was doing research for this article. Again notice the high quality and visually dynamic content.
Sure, he drinks from a can, wears the hat and the logo shows up here and there. But if I had just embedded it somewhere, you might never know that it came from the Red Bull YouTube Channel. Another thing about what they’re doing is pushing out a lot of content. Three or more videos per day from the look of things. In the last week they’ve pushed 39 videos to their YouTube channel. Here’s the most popular of those… which features a somersaulting, barrel rolling helicopter, Tom Cruise and David Coulthard, the F1 driver. How popular? Some 420,000 hits in 6 days.
You can see why it’s popular just by watching it, there’s some awesome stuff in there. I learned two things watching this one. Tom Cruise is quite talented in several things outside of acting, and I want to go drive an F1 car. I also learned why Red Bull is seeing success in their branded content campaign. The intentional de-emphasis they place on the brand and the emphasis they place on interesting, visually compelling content. This is certainly branded content done right. It’s got fast cars, high-flying action and big name personalities… and absolutely, no scantily clad women!
Sex, apparently, is not the only thing that sells. Granted, I still don’t want to go drink their product because I think it tastes like terribly syrupy acid but I am probably more inclined to be a fan of their sports teams and perhaps even, wear some of their logo’d gear myself. If you’re considering working in branded content in any way, you should definitely sit down and watch the last couple weeks of their videos to see what it is they are doing that has netted them 3,241,000 channel views, 183,032,000 upload views and 220,000 subscribers to their YouTube channel.
Watching their content and noticing who and what they align the brand with shows you exactly what they’ve set out to do. They’re not extremely visible in the more mainstream sports but have certainly become a dominant factor in the extreme, the innovative and the downright awe-inspiring stuff that people do in competitive fashions. Why? Because they’re an energy drink, and you need a lot of energy to pull some of that stuff off… whether or not you drink their product while actually doing it, is moot.
Here’s an article that led me to mine over at Brand Channel who went further and spoke with Red Bull about what they’re doing. Credit, where credit is due, right? I just want to lift this bit of a quote from them because I think it sums it all up very nicely: “… Red Bull does the opposite. It thinks about making content that its audience will want to see and figures out how to remove as much branding as possible. ” -Dietrich Mateschitz Source: Branded Video Content Helps Red Bull Find Its Marketing Wings http://www. reelseo. com/red-bull-branded-video-content/#ixzz1cj9XT4HU ©2008-2011 ReelSEO. om Online Video Guide Why Red Bull Ignores Its Advertising Agency? Written by Igor Beuker on February 23rd, 2010 | 9 comments Probably we all know the Red Bull TV commercials, with the ever happy ending and wings. The campaign has been broadcasted for 23 years in 160 countries. For the new campaign Red Bull ignores its advertising agency, now all consumers in The Netherlands can think along. And that’s about time. Because to me, Red Bull has been a core identity brand for many years. I loved their cool events and sponsorships.
But the never ending boring series of TV commercials made me change my mind. I started to dislike the Red Bull brand due to their TV ads. Per 1 March 2010 every Dutch consumer with a creative mind can send his script to Red Bull Decide The Story. User created scripts must fit the mandatory format, in which the animated “anchor” cartoon will stay the main character. The TV spot must be 15 seconds max. The best rated scripts will be produced into a TV ad and will be aired on TV. The winning script writers will be involved in the production of the spot. I do hope to see some fun scripts.
And really hope to see a refreshed Red Bull brand. Because they will need a cosmic collision to find all the available GRP’s on this planet that will make me a Red Bull fan again. How do you like the current Red Bull TV commercials? Red Bull – Advertising Campaign Case Study Feb 2011 Re-energizing consumers at both ends of the day The Energy Shots variant are located near Customer face Display Units (CDUs) at the till point, in direct proximity to the digital signage screen, and in the ideal location for advertising to prompt immediate consideration and purchase.
Background Red Bull used the Forecourt network for the launch of its Red Bull Energy Shots variant in February 2010. Since then Red Bull has utilised the Forecourt network to its full extent by running tactical advertising campaigns at specifically selected time to reach their core target audience. Campaign details The Red Bull advertising campaign first ran in November 2009 across the Forecourt network, then in February 2010, April 2010, August 2010 and again in March 2011.
Digital out of home’s flexibility enabled Red Bull to advertise on the forecourt convenience network at the most relevant times of day –first thing in the morning, between 6am and 10am, for a wake-up energy boost; and early evening, between 4pm and 8pm, when consumers are looking for a quick lift to keep them going throughout the evening. We worked with Red Bull to animate the first Red Bull Energy Shots static creative, which was linked inextricably with the forecourt environment. It featured the unmistakable Red Bull animated cow driving a car, and ended on a still of car keys and an Energy Shots carton.
Red bull continued to engage with a motoring audience, using their creative to make an explicit link between a motoring audience and an ideal drink choice for boosting energy whilst on the move. Results EPOS analysis was ran for one of the Red Bull campaigns which showed a 20% sales uplift. This was particularly impressive given that at the same time a price promotion was running on the 250ml Red Bull Energy cans so we might have expected less of an uplift. http://www. amscreen. co. uk/digital-advertising/redbull-screen-media-advertising-campaign. html Red Bull: Digital Strategy
Submitted by Nick Avram on Mon, 07/18/2011 – 1:26pm * Our Audience: * As Red Bull, our audience or target market consists of middle to low class male and female (mostly male) consumers, that range from ages of 14-35 on a global market. Our key brand persona characteristics consist of: a young to near middle age man or woman, that is active in sports, extreme hobbies, and physical activities. That like to indulge in seeking adventure in life, are experts on all of the latest technologies (ex: touch screen phones, tablets, and laptops), and actively on the web. Our Goals: 1. Increase brand awareness 2. Increase brand loyalty 3. Increase web-rich content on Red Bull websites for consumers (keep them on our websites longer) 4. Increase revenue 5. Increase energy drink market share (Nationally and Globally) 6. Increase Activity on our websites * Our Strategy: * Implementing SEO: Search Engine Optimization using Google Tools and Google AdWords * Tracking our target market and what actions they take after a search result and or what actions they take on our websites * Develop our brand persona Constantly sharing news feeds/updates about our organization to stay relevant * PR efforts * Viral Video series of red Bull hosted events/competitions. * Our Plan Of Actions: * If we want to implement SEO, we must use Google Tools such as Google Analytics, Google Sitemaps, Google Search Index and others that allow us to see what are popular topic trends, search keywords (so that we can use the same for better search results), what web-rich content our consumers