SPEEDINACAN

THE RED BULL STORY

“It’s not what you do. It’s what they do with what you do.”
— John Grant, The New Marketing Manifesto

“Don’t quit your day job!”

The market research results were
devastating. The thin color of the new
drink was totally unappetizing, the
sticky mouth feel and taste were
deemed ‘disgusting’. And the concept
of ‘stimulates mind and body’ was –at
best – rated irrelevant. The verdict by
the research firm: “No other new product
has ever failed this convincingly.”

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But Dietrich Mateschitz was past the point of
no return. He had exited the corporate world
exactly three years prior to the NPD research
to import a new type of energy drink he dis-
covered in Asia called Red Bull. And it was
not just the destructive consumer reactions to
his drink that would make his entrepreneurial
career initially miserable. It was also the
never-ending quarrels with the Austrian FDA
to get the first energy drink approved in a
European country, and the fact that his friend
and ad agency owner could not come up with
a single good ad campaign idea during this
entire time. “They were the worst three years
of my life,” reminisces Mateschitz today. This
retrospective may make the billion-dollar
success of this single SKU sensation ever
more captivating.
Red Bull belongs in the marketing hall of
fame. Alongside such enigmatic miracles as
Hotmail, Palm, eBay or Starbucks, they beat
all odds and threw conventional marketing
wisdom overboard to develop a new, powerful
go-to-market template. What makes Red Bull
unique in this group of anomalies is its
leader’s background in classic marketing.
Other than Red Bull, these were all non-cor-
porate start-ups, driven by intuitive visionar-
ies without classic marketing training. Which
made it easier for them to develop a marketing
plan that’s right, rather than one by the books.
The market research disaster may have been
the epiphany for Mateschitz. He had tried to
position Red Bull according to the tools he
had learned at such companies as Unilever and
Kraft. But this was a disruptive product:
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• It established a new category, finally
serving the need for a legal, yet ‘hip’
stimulant
• Its taste sucked…to put it mildly (it gets a
D+ from BevNet, for instance). A first in
the broader soft drink category to place
no importance on taste
• It created an ultra-premium price point –
about 8 times higher than a Coke – with
out any third party efficacy endorsement
to justify the steep margin
• It was a complex sales pitch to consumers.
Multiple layers of storylines in a category
of shallow and single-minded images
What Mateschitz learned out of this invaluable
research was how important context was to the
success of Red Bull. No wonder the concept
had failed in a sterile environment of a
research studio. Red Bull needed to be expe-
rienced. Just like Gatorade only worked in
taste testing when participants were dehydrat-
ed and the Gatorade ice cold, Red Bull won’t
score high in a lab situation. It is at its core a
functional drink, intended to provide a boost
of energy. But on top, to survive in a catego-
ry where image rules, Red Bull needed to
establish an attitude (vs. an image), and not
just be sold as an over-the-counter nutraceuti-
cal, if it wanted to reach significant scale.
Another crucial lesson Mateschitz learned in
the pre-planning years was the specific role
advertising must play for such complex
brands. No wonder his agency, led by
Johannes Kastner, the former Managing
Director of Leo Burnett’s German office,
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could not develop the right ad campaign.
They initially viewed advertising as the
overarching tool in the marketing mix. Once
they realized that the ads’ only purpose was
to build awareness and likeability – and not
do the overall marketing job (i.e. to establish
and increase the understanding and accept-
ance of the energy drink segment) the job
became much easier for the creatives. In an
infamous last ditch effort, Kastner’s team
came up with the “Red Bull gives you wiiiings”
ad campaign, whose odd-cartoon, problem /
solution format has been run consistently since
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1988 in TV and radio throughout the world.
The bulk of Red Bull’s marketing has been
(what conventional marketers would call)
below-the-line. Red Bull needs to be expe-
rienced within the right context, both in
terms of functional needs and appropriate
ambience. Hence, the bulk of the brand’s
marketing is spent on extensive sampling
and event sponsorship.
Let’s look closer at some of the drivers that
made Red Bull such a success:

An Urban Legend -- even before it launched

As painful as it may have been to get approval for Red Bull’s ingredients in each
country, this waiting period was ripe for interpretations and rumors by the market. To
be clear: there is nothing harmful in Red Bull. But its unique composition, especially
its novel ingredient taurine, made for a long approval process.

It took five years to gain permission for export into Germany, Red Bull’s second mar-
ket and the one that served as foundation for the brand’s success and cash cow for
further expansion.

Initially, Munich (which is close to the Austrian border) became a flourishing black
market, and speculation started why the drink was illegal in Germany: Was it speed-
in-a-can, a legal drug? Was its taurine sourced from bull’s testicles, making Red Bull
an over-the-counter Viagra? (In fact, taurine had initially been found in bulls, but is
produced synthetically today.) The list of rumors goes on endlessly, and the company
smartly added a ‘rumors’ section to its web site to keep the mythology going and
evolving.

It also helped that German moms united, once Red Bull finally launched in Germany,
to have it banned again. The timing of Red Bull’s launch coincided with the emer-
gence of all-night raves and ecstasy consumption, which brought Red Bull even clos-
er to the world of drugs. Hence, Red Bull became instant ‘cool’. As Pountain and
Robins point out in their study of the ultimate attitude, Cool Rules, “cool is an oppo-
sitional attitude adopted to express defiance to authority. Kids want simultaneously
to be acceptable to their peers and scandalous to their parents.”

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Thanks to the boycott of concerned mothers and the slow approval process by the local
FDAs, Red Bull became cool and a hotbed for rumors, urban myth, hype and anticipa-
tion. As a matter of fact, Red Bull totally underestimated the pent-up demand, and ran
out of product within its first three months of launch. It was sold out everywhere, which
was a clear sign to the main market in Germany that something major was happening
here and to better jump on this latest bandwagon.

This myth-building strategy – and the latent uncertainty about Red Bulls’ ingredients
and effect -- still works today. In his article “Liquid Cocaine”, Salon journalist Jeff
Edwards concludes that “the more rumors of Red Bull’s potentially dangerous, over
stimulating effects spread, the more the drink sells.”

Here is a product – non-alcoholic, about as caffeinated as a cup of coffee – that’s managed to acquire a rep-
utation as an over-the-counter amphetamine, a surefire wild-times elixir, all the while squirming its way
into bars as if it were the latest offering from Anheuser-Busch. If Gatorade is sold to us as a “sports drink”
with its promise of replenishing electrolytes, Red Bull’s marketers will have us believe that their product is
a party drink, a stimulant, an aphrodisiac, a raver’s “smart drink” gone mainstream. The strategy is rumor by
omission, and, only when absolutely necessary, denial: Red Bull has carefully and intentionally cultivated
the mystery surrounding its product; the public has filled in the blanks with speculation and innuendo.
Meanwhile Red Bull sells and sells.

And headquarters clearly don’t mind. “I always have to fly to Pamplona to source bull’s
testicles,” jokes Mateschitz. “Those rumors have never hurt,” he adds joyfully.

Product Performance

“Bottom line, this product works”, is the earnest response you will hear from just
about every Red Bull employee (and, consequently, evangelist). Red Bull provides a
quick boost of energy, a tangible difference.

And it is marketed as such, with claims of effect usually confined to the OTC pharma-
ceutical category. Red Bull broke convention by promising a physical benefit rather
than a taste or image one. This is not the place to speculate whether the product actu-
ally works in a unique way (nutritionists argue that a Coke’s combination of sugar and
caffeine provides the same short term effect), or whether it is simply a placebo effect,
but Red Bull’s unique product and focus on a functional benefit clearly attacked the
soft drink industry, where it is weakest.

On top, the product polarizes, which turns its converts into stronger, more passionate,
believers. It is an acquired taste, that’s for sure! Imagine a flavor in-between gummy
bears and cough syrup. Red Bull, themselves, ignore the taste issue, and thus achieve
to make it disappear. They never market or describe it. “The taste doesn’t matter”
defends Mateschitz. “Red Bull isn’t a drink, it’s a way of life.”

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“Functionality” As Common Thread Throughout all Marketing

Red Bull embodies energy and stimulation in everything that they do. It is the one
“theme” which guides the company’s efforts.

An obvious example is sampling. Their efforts don’t usually go for volume. Instead,
they seek out the likes of raves or movie studios (they sample to staff during production)
– places where people are in genuine need of a real (legal) boost. Their consumer pro-
motions aren’t typical either – sweepstakes, coupons and the like. Instead, Red Bull pro-
grams call for action – they invite consumers to creatively interact with the brand, by
building their own “wings” or sculptures.

But Red Bull takes their belief in “functionality” even a step further: For example, Red
Bull doesn’t use print media. The flatness of the medium doesn’t connote movement and
energy. Or take their branded on-premise merchandise: It never is just window-dressing.
It needs to have a functional benefit or it won’t get used.

By embodying the functionality of the drink into tangible programs and events, Red Bull
turns its performance claims into a reality. And it underpins the unwavering commit-
ment to the brand’s efficacy to both its employees and the public, who shell out a huge
price premium without a single validated piece of evidence.

Participation Marketing

Red Bull’s strongest asset is it cult-like following by its consumers, bar staff and other
stakeholders. Letting the market participate in its marketing may have evolved out of
necessity in the beginning. But it has turned into its most powerful marketing tool. Red
Bull initially simply did not have the investment to spend heavily in advertising. They
were a self-funded start-up.

The company knew how to facilitate the creation of Red Bull as an urban legend, and
they understood how to turn the market into willing participants to hype the brand. “Red
Bull is willing to invest a lot in making sure people become believers in the brand
through hands-on experiences,” explains Adam Comey, a Red Bull event planner. It is
one of the very few brands that understands how much more valuable a deep personal
experience and peer endorsement is than an ad campaign, even though a truly orches-
trated guerrilla campaign can be much more expensive than any broadcast media. What
are some of Red Bull’s guerrilla principles:

Get up close and personal

Red Bull isn’t a distant and aspirational marketer (e.g. “Look how cool we are.

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Don’t you wish you could be one of
us? Well, buy ____!”). Their mar-
keting takes place on the street.
With the people. My favorite per-
sonal anecdote: A sampling team
got wind that I threw World Cup
parties every night last summer at
my place for about 20 or so soccer
fanatics. They surprised us at 4 a.m.
during the Germany vs. U.S.A.
quarterfinals match, with their hot
and fun sampling team providing
just the right startling energy boost
all of us needed at that moment.
Of course, as soccer goes, the
Germans won in the end, but the
game will be more readily forgotten
than the Red Bull team for all of us
crazed supporters.
We became participants in the event,
ready to tell our friends not only how
cool it was for them to come by, but
more importantly how Red Bull really
helped keep us awake and alert.
A convincing, entertaining and
memorable event that no broadcast
campaign could ever duplicate.
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Not that the marketing team at Red Bull has a
perfect record. Every once in a while they screw
things up, but by giving an overall genuine effort to
respect their community, any mishaps are easily
forgiven.
In the late 90’s, Red Bull went into an innovative
placement deal on a Playstation game called
WipeOut 2097. It was one of the hottest games
around, when Playstation launched in Europe,
packed with super graphics, an adrenaline pumping
gameplay and a killer soundtrack including such
faves as The Prodigy, Daft Punk and the Chemical
Brothers.
In keeping with its functionality theme, Red Bull
integrated itself into the game, providing extra
energy and improved reaction time at a click on
its icon.
A cute idea at first glance. But it backfired. It felt
intrusive and un-natural. Most players either
ignored it, or they actually got quite irate.
A typical on-line review read as follows:
General/Summary: Fast, Elegant, Sell out?????
Wipeout XL is a great game to play over and over.
The thing that bothers me the most about it is the
advertising to Red Bull drink.The companies that the
game made up for it's self are cool enough. The fact
that they took Red Bull drink into the game kinda
makes you feel like your no longer on the race way
but in an advertisement. If you can just ignore it then
the game is great but it is an eye sore to see
"improve reaction time Red Bull" every time you’re
waiting for the game to load.
Screen name: Archimedes

Red Bull furthermore ensures that consumers don’t feel pressured to drink Red Bull
in a certain way. During their sampling, they always provide a full and closed can,
so that consumers can decide when and how much to try. “We don’t try to control
how people use Red Bull,” explains North American spokeswoman Emma Cortes.
A very refreshing hands-off approach, that ensures that lead consumer groups feel a
closer connection to the brand and like a true partner to the company.

Getting up close and personal reduces barriers. Red Bull’s intimate approach made
them part of the scene. Competition – in the loosest sense – has been left in the
‘grown-up’ world of marketing.

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Appeal to the market’s creativity
Red Bull’s promotions (other than
their professional extreme sports spon-
sorship) are participatory. Like the
open invitation to join the Flugtag
(German for flying day), an event that
has amateur pilots create exotic flying
machines and attempt to soar off pic-
turesque spots like the Austrian Alps or
the Santa Monica pier. Like the Red
Bull Creative Contest which encour-
ages entrants to “immortalize the can Consumer art a la Red Bull
forever in the form of sculptures, collages, designer fashions and even precision
engineering.” Or it could be a twist on music endorsement. Rather than sponsor
concerts like everybody else, the company created the Red Bull Music Academy for
aspiring DJs to participate in workshops with some of the top DJs in the world.
Brandweek’s Ken Hein describes the latest Academy held this summer in New
York’s Lower East Side:

The collection of 60 aspiring deejays from Croatia, New Zealand, Slovakia and, of course, the U.S. were invit-
ed to learn from masters like Derrick Carter, who taught the “art of holding the 10-minute bend.” Herbert
held forth on how to “funk up that bag of crisps” and David Steele spoke about “law and the music indus-
try.” Artwork adorning the walls was provided by Freddie C, a well-known graffiti artist from Los Angeles.
The Academy, now in its fourth year, previously held classes in Berlin (twice) and Dublin. Its purpose is to
give these kings of clubland,where Red Bull is often consumed,a once-in-a-lifetime chance to meet their heroes.

Unlike other efforts, where a liquor company hires the 10 hottest deejays and packs a club with 10,000 peo-
ple, the school is more personal and intimate. When these students return to their respective countries and
dance floors, they will often speak of what they learned and who they saw at the Academy.

They won’t be asked to push the drink or hand out T-shirts and key chains. Actually, they aren’t required to
do anything. But when they regale deejays and club-goers with tales of their pilgrimage, the words “Red
Bull” are likely to leave their lips, giving the brand its vital word-of-mouth hype.

Red Bull begins to weave into all aspects of people’s lives and comes to mean dif-
ferent things to different groups without ostracizing any of them. There is no right
way to use Red Bull, no code of conduct (for consumers). It effortlessly crosses
socio/economic boundaries.

Consumers are asked to use their imagination in fitting Red Bull into their lives. It
helps get them deeper into the Red Bull experience and truly understand its role.
This is hands-on absorption of a breakthrough product, rather than processing an
abstract communication effort. Creative participation keeps the brand relevant as it
encourages consumers to continuously re-interpret Red Bull for themselves. And it
underlines the often-overlooked message that it stimulates the mind (not just the body).

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“The Consumer as Art Director”

Anthropologist Ted Polhemus coined this phrase, in the context of fringe fashion. But
it rings true for Red Bull as well. The brand did not only let the market participate, but
reinvent the product usage. The market became co-creator, or more symbolically, ad
agency, for the brand they passionately endorse.

The most powerful aspect of buzz occurs when the early market enhances the original
brand idea by creating a larger brand meaning or new uses of the product.

Red Bull is an example of a brand that finally tipped, when the market created new uses
and rituals:

It became a mainstream staple as soon as bartenders introduced the Stoli Bully

across Europe. The legendary cocktail, comprised of Red Bull and Vodka, was
rumored to have the power of ecstasy.

Red Bull’s sales force could have never dictated a signature drink to bartenders. But
by targeting on-premise distribution at trendy night spots, they were able to facilitate
the product usage evolution of its brand by its early market.

By tweaking the initiative, the early market makes brands like Red Bull meaningful to
the mainstream. Lambesis’ former head of research, DeeDee Gordon explains how this
twist by the market results in mainstream acceptance:

Those kids make things more palatable for mainstream people. They see what the really wired kids are
doing and they tweak it. They start doing it themselves, but they change it a bit. They make it more usable.

Maybe there’s a kid who rolls up his jeans and puts duct tape around the bottom because he’s the one bike
messenger in school. Well, the translators like that look. But they won’t use tape. They’ll buy something
with Velcro. Or then there was the whole baby-doll T-shirt thing. One girl starts wearing a shrunken down
T-shirt. She goes to Toys R Us and buys the Barbie T-shirt. And the others say, that’s so cool. But they might
not get it so small, and they might not get it with Barbie on. But there’s a way I can change it and make it
okay. Then it takes off.

Red Bull is an example of the influence of early markets on the adoption of new ideas.
They alter brand initiatives in such a way that they make sense to them and into some-
thing the main market can understand. As a result, the brand initiative itself acquires a
deeper meaning.

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Seduction vs. Propagation

A major reason for its market’s passion for Red Bull is the company’s lack of aggres-
sive in-your-face push tactics, price-offs, and instant ubiquity, so often practiced in the
beverage category.

Red Bull’s marketing is designed for the subconscious. Its marketing seduces, making
the consumer feel in charge.

One major seduction tactic they employ is exclusivity. The brand makes it initially hard
for the market to experience Red Bull. Sampling focuses on exclusive sub-communi-
ties, and even the trade hears “No, you can’t have it yet,” a definite first in packaged
goods! When Red Bull comes to town, they initially select a handful of outlets that can
sell the brand. A tactic counter to those typically applied in the beverage industry. Take
the beer industry, for instance, a market that hasn’t seen a new brand success in decade,
ever since the deliberate launch of Sam Adams. Instant distribution and awareness
ubiquity and intruding promotion tactics (like those used for A-B’s fleeting Tequiza)
can’t charm an early market and make them feel ownership of the brand.

Concludes Hein: “It’s no wonder that rival beverage companies and analysts alike are
so mystified by Red Bull’s success, where sales seem to sprout from cracks in the pave-
ment. The fact of the matter is, there is a party going on and the people who travel by
day haven’t been invited yet.”

Internal Culture

Red Bull is on a mission. Every employee –hell, even every vendor – is totally on
board! This fosters alignment and clarity. It’s an internal culture of the over-
achieving underdog, with an amazing survival instinct. Mateschitz and his team
have had the unique ability since inception to turn every challenge into an opportu-
nity. And they continue to act as the underdog in the industry by continuously prov-
ing every naysayer wrong; whether it was experts doubting their unique distribution
network or success in North America, after the brand had already become a major
success in Europe.

Importantly, they really believe in making a difference. And this belief carries
through their organizational structure, with a dedicated education and coaching
approach rivaling that of Nike’s Ekin team (you know, the sales education team with
the swoosh tattooed on their ankles).

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Red Bull is personality driven, with the charismatic life-embracing Mateschitz as its
leader and an unlikely primary apostle in Johannes Kastner, the head of Read Bull’s
ad agency. It is probably the strongest client /agency relationship in the business,
with the ad agency as true, long-term partner rather than dispensable vendor.

Red Bull thrives on its entrepreneurial structure. Little hierarchy. “Management by

organized chaos”, as Mateschitz describes it. A fully committed team hired prima-
rily for their passion and non-conformism. Mateschitz himself makes sure to only
work three days a week to live the life of extreme sports his brand endorses.

Consistent Persona

Red Bull means different things to different people, and caters to different occasions.
Writes Hein: “Ask someone to define it and the answers will vary. For instance, The
Fire Island (N.Y.) News has dubbed “The new sex drink,” while a 13-year-old boy in a
local deli said, “Me inspira a bailar” (“It makes me dance”). And, according to a
waitress in a New York City wine bar, “If you mix it with cough syrup, it makes your
cold go away.”

Despite this lack of unique selling proposition, they have done an amazing job, both
over time and across geographies, to deliver a consistent brand persona. Steve Henry,
founder of London’s most disruptive ad agency HHCL, argues that what he calls the
Unique Selling Proposition, is likely the key to successful marketing and advertising:
the definition of the character of the brand is more important than any proposition about it.

Red Bull has gone through great lengths to develop a brand bible and to provide a brand
coach for each region to ensure that each manager begins to understand intuitively
whether a specific activity is true to Red Bull.

While they are extremely flexible in creating tailored geographic programs, each of
these programs is a testament to Red Bull’s persona.

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DON’T JUST BREAK THE RULES…

DEVISE NEW ONES!
Red Bull may have become the gold standard on
how to launch innovative food & beverage
brands right, but its magic sauce has rarely been
identified and applied correctly within the large
bureaucracies of its conglomerate competitors.
This is partly because Red Bull is understandably
hushed about its strategy. Why give away the
farm and let competitors in on your intellectual
capital? For instance, Red Bull has never entered
industry awards like the prestigious IPA
Effectiveness Awards that require a thorough
description of their efforts. They have also suc-
cessfully avoided any thorough case study in
either trade magazines or marketing books.
But the other reason for competition’s failure to
duplicate its go-to-market template has been Red
Bull’s rule-breaking in just about every aspect of
marketing. They were not only disruptive in one
or a few key activities; Red Bull rewrote the
book with a whole new approach to marketing.
As much as larger companies spent money on
consultants to benchmark the brand and then
tried to emulate it, they just about always failed.
It was just too large a stretch; too much of a dif-
ferent mind-set. Let’s take a closer look at some
of the fundamental differences; at how Red Bull
consistently and successfully manages to do the
opposite of what everybody else does:

Positioning

Conventional Mind-Set: Create a socially aspiring image

Red Bull Mind-Set: Create a functional foundation: show how the drink
fits into people’s way of life

Red Bull was one of the first modern brands to turn away from an aspirational image.
Any allusion to ‘hip’ or sex was purely in consumers’ minds, not images of a Red Bull
ad campaign. The ads simply promised an energy boost through the ‘big picture’ of
developing wings on people in dire situations.

Advertising

Conventional Mind-Set: Advertising launches the brand and stays the lead
marketing tool

Red Bull Mind-Set: Advertising airs only after the launch phase and plays
a limited and specific role within the marketing mix

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“Media is not a tool that we use to establish the market. It is a critical part. It’s just later
in the development, ” explains David Rohdy, North American VP Marketing.
Advertising is used to reinforce, not introduce, the brand experience.

Red Bull clearly understood that orchestrating word-of-mouth is expensive, but the best
medium you can have.

But the company is also clever at the more subtle aspects of media planning. For
instance, they stay off-air during the peak summer months, at times when share of voice
would sink significantly anyways. They focus on progressive and innovative TV and
radio stations and they stay out of print, so the brand message doesn’t look flat or dated.

Targeting

Conventional Mind-Set: All consumers are created equal

Red Bull Mind-Set: Some consumers are definitely more equal than others

Red Bull is all about seeding early markets. That’s where they spend their money and
efforts. They do it with a lot of respect, giving back to the scene, rather than trying to
co-opt it. But they also not only go after the ‘cool’ people. Red Bull is not an image
chaser. They penetrate those scenes, where their functional benefits will make a differ-
ence. That could be the ultra-cool raver scene, the extreme sports scene, but also the
unglamorous world of truck drivers and office workers.

But Red Bull even took it a step further. They treated every stakeholder like a consumer.
When Red Bull initially came to the U.S., it focused its pre-seeding efforts on New York
City, where the brand was already hyped by the city’s large European influence. The
first thing the company did was making the product available – under the radar – to bar
staff of hip on-premise accounts. To let them experience the energy boost on the job,
and basically treat them preferably to consumers – surely a first. The product was deliv-
ered by cabs initially (getting taxi driver support along the way), and Red Bull became
an instant hit with these tastemakers, and invaluable influencers of bar call choice.

The tipping point in NYC came when Demi Moore overheard bar staff brag about the
brand (at a time when it was not even officially available yet), and went through quite
an effort to get a hold of cases of Red Bull herself.

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Red Bull clearly understood how to involve crucial stakeholders in the marketing of
their brand. Rather than buying their support, they asked bar staff to participate; to
provide their endorsement voluntarily, hence credibly.

Distribution

Conventional Mind-Set: Broad availability is used to create demand

Red Bull Mind-Set: Create demand before broadening availability

As disruptive as Red Bull’s distribution strategy is, it is consistent with its go-to-mar-
ket principles. They slowly and deliberately open up to the main market over time,
dividing each country into individual, autonomous cells. In the US, they’ve entered
markets by signing non-exclusive deals with larger distributors. As volume builds,
Red Bull has taken distribution back, helping to start small distributorships that can
focus exclusively on their brand. They were the first non-alcoholic beverage to focus
on the on-premise, and have some of the highest spending on education/customer
service in the industry.

Another important paradigm shift is the company’s focus on conceptual distribution

vs. weighted distribution. In other words, Red Bull view distribution as a branding
tool, not just a volume outlet. Just like Gatorade had developed a conceptual
approach to distribution by prioritizing “points of sweat” (making sure that Gatorade
has been available wherever athletes are active), Red Bull focuses on proximity to
functional need and ambience.

“If somebody told me five years ago that somebody could set up a system like this, I
wouldn’t have believed it. I wish everybody served me as they do,” evaluates Store
24, a U.S. key account.

Marketing Mix (Sampling)

Conventional Mind-Set: Sampling is all about quantity (reach)

Red Bull Mind-Set: Sampling is all about quality (much lower reach, yet
the experience of a tangible difference)

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Red Bull doesn’t care that much, how many people they sample. Rather, they focus on
a deep experience during that sampling.

In the early days, when the company’s go-to-market book had not yet been written, the
German field manager abruptly quit her job, when Red Bull started sampling out of
plastic cups in supermarkets. When Johannes Kastner heard about her quitting, he
immediately reinstated her, and codified the brand’s sampling guidelines.

Celebrity Sponsorship

Conventional Mind-Set: Celebrity endorsement has a steep price, but

gets publicity

Red Bull Mind-Set: Pursue those celebrities that are fans of Red Bull,
but don’t pay them

Red Bull take celebrity endorsements very seriously. In fact, they dedicated a senior
manager full-time to look after celebrities and make sure that every Red Bull experience
they have is a great one. But the company won’t pay for VIP support (other than
extreme athletes). Instead, the company positions Red Bull as a part of the celebrity
lifestyle. For example, they regularly gave product to studio production staff during the
early days of the US launch. In this way, some celebrities became acquainted with the
brand and the relationship becomes genuine and reciprocal.

Madonna has had Red Bull on stage at quite a few concerts, but the company has never
paid an endorsement fee for it.

And by treating celebrities differently than any other marketer, they get deeper, more
loyal relationships. For example, Formula One racer Jensen Button was recruited not
by employees, but by his racing buddy, Eddie Irvine, who was a big Red Bull evangel-
ist. When Button met with the UK team, he was surprised that by the nature of the
“endorsement deal” - the company made it clear to him that there would be no contract
and no fee. All they wanted was his enthusiasm and they would reciprocate in kind.

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Merchandising

Conventional Mind-Set: Tchotchkes rule!

Red Bull Mind-Set: Keep merchandising out of consumer reach

Another fantastic exclusivity/scarcity tactic. Red Bull only gives out merchandising
(like wearables) to their sponsored athletes. Consumers don’t have access. Branded
merchandising does not mean anything, if you just give it away in masses. Murray
Partridge, the former Creative Director of TBWA London calls this tactic ‘nickable’, the
British term for stealing. The idea is for consumers to try hard to get a hold of any Red
Bull merchandising, and when they do, they cherish it like a prized possession. And just
as importantly, they will also tell friends and acquaintances about their misadventures –
thus adding to the mythology of the brand.

Network Relationships

Conventional Mind-Set: Vendors are lucky to work for us!

Red Bull Mind-Set: Treat all stakeholders as partners

Red Bull wants every contact they have – whether distributor, event planner, C-store
owner or journalist – to be a fan of Red Bull and to be blown away by Red Bull’s cus-
tomer service. While potential distributors, that have been rejected, deem the company
arrogant, every business contact with supporters of the brand is considered crucial.
Every stakeholder is treated with respect.

For instance, Red Bull gets incredible cultural press coverage. Why? They provide
extensive photo files (and product sampling) for journalists.

If that isn’t breakthrough enough, consider this: Red Bull does not only treat business
partners with respect, but also treat their social network as (business-) partners integrating
collaboration with sub-cultures into their company model.

Bottom line, Red Bull discovered and appreciates the value of its business and social
network as a source of competence.

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Corporate Leadership

Conventional Mind-Set: Clear annual volume and profit objectives and fast
financial payout

Red Bull Mind-Set: Patience and investment

Mateschitz has resisted all temptations to sell out or go public. Without the pressures
by a short-term thinking board, the company can actually focus what’s right for the
brand and the business in the long term. How fascinating and old-school! Imagine a
firm that does not have to alter budgets at the end of each quarter to make its numbers,
and can actually manage their brand rather than the stock price. The U.S. success has
been an overnight success five years in the making. There hardly is a conglomerate that
would have allowed a long and expensive California test market with limited distribution
and low volume…

“If someone preaches profit-maximizing as a company’s highest goal, then that’s sim-
ply wrong. Hell, it’s criminal”, says Mateschitz. To him, a company’s goal is about the
quality of his product and the coaching of his people. Before you start giggling about
such naïveté and unworldliness, let me briefly remind you that Mateschitz’ personal
wealth is estimated at about $5 billion. Amen, brother!

Alex Wipperfürth (alex@plan-b.biz) is a Partner at marketing boutique Plan B in San Francisco.

The Red Bull case study is an excerpt from his upcoming book Brand Hijack.

© All rights reserved. Plan B. 2003 Speed-In-A-Can The Red Bull Story