By Kenji Farré
They sell only one product. How did they become such a powerhouse?
Though nowhere near the sales figures of Coca-Cola, Pepsi, or Starbucks, the Red Bull brand is just as iconic.
So how does a brand that only sells one product gain the same amount of recognition? What keeps them ahead of the curve? And perhaps most importantly, what are the secrets of Red Bull’s marketing success?
Dietrich Mateschitz, an Austrian marketing director at a toothpaste manufacturer, first discovered energy drinks on a business trip in Bangkok. Suffering the effects of jetlag, locals directed him to a Krating Daeng, a Thai beverage claiming to boost performance and concentration. Back then, though caffeinated sodas were popular in Eastern Asia, the Western world hadn’t seen much of them.
Sensing an opportunity, Mateschitz quit his job in 1984, partnering with Krating Daeng’s manufacturer to create an energy drink for the European public.
Though it took them three years to begin selling, Red Bull has since grown into an industry powerhouse, with $7.5 billion in annual sales, over 12,000 employees, and a presence in 171 countries, making Mateschitz one of the richest men in the world.
Marketing With a Limited Budget
1. If you can’t afford to sponsor events, create your own
Like many young startups, Red Bull didn’t have the resources to advertise on TV events, radio shows, or billboard ads. Instead, they decided to create their own event: The Red Bull Flugtag. Roughly translated as flight day, the competition consists of “building homemade, human-powered flying machines” to jump off a three-story deck with water as the landing site.
Given the absurdity of the event, large crowds began gathering to witness the spectacle, and word quickly spread about the Red Bull brand. Since its inception in 1991, the Red Bull Flugtag has attracted huge masses, with a record-breaking 220,000 thousand people attending in 2012.
2. Guerrilla marketing
In Red Bull’s early years, they placed empty cans in crowded public areas to create the impression that the brand was popular. Given the high pedestrian traffic, this was an ingenious way to get free advertising and gain notoriety. They could even target specific groups of people by leaving cans on college campuses, stadiums, or night clubs.
While this strategy was controversial and likely unauthorized, it was probably worth the gamble given the low-cost and high potential reward.
Sticking to Their Niche
Red Bull’s only offering is an energy drink.
Sure, they have different flavours, but that’s it. No smoothies, teas, or juices. While Pepsi and Coca-Cola have diversified into water (Aquafina and Dasani), sports drinks (Gatorade and Powerade), and even food (Pepsi only), Red Bull is sticking to what they do best.
While publicly traded companies have financial pressure from investors to expand, improve margins, or diversify, Red Bull can afford the luxury of sticking to their core product because they’re privately owned.
Selling a Story, Not a Product
Brands that successfully cultivate customer loyalty don’t merely focus on having a good product. They carefully create a narrative that goes much deeper, invoking emotion among customers. That’s brand loyalty. For Apple it was “1,000 songs in your pocket,” for Nike it’s “Just do it,” and for Red Bull, it’s “Gives you wings.”
Sponsoring events ranging from record-breaking Orbit jumps to Formula One race cars are not so much about selling drinks, but rather creating a strong brand image that is synonymous with adventure, thrill, and adrenaline.
Though the end goal is obviously to sell, creating stories is what gives Red Bull an edge over competitors, allowing them to charge a premium and maintain a loyal following.
Getting the Name Right
Red Bull was founded in 1984, but it only went to market three years later. During that time, Mateschitz worked on getting the branding just right.
When drinks with sugar and caffeine first came out, people called them beverages, soft drinks, or sodas. Pepsi came up with the “Pepsi AM” while Coke called it “Coca-Cola in the morning.” Despite their huge marketing budgets, nobody was as ingenious as Red Bull coining the term “energy drink.”
You could argue that modern-day Pepsis and Cokes aren’t intended to give you energy. But in the early 20th century, there was cocaine in Coca-Cola, which I’d imagine was more energizing than anything on the market today. Yet nobody called it an energy drink.
- Though it’s surely easier, you don’t need large advertising budgets to get eyes on your product.
- Have a greater cause than “growth” or “profitability.” Customers love to feel part of a larger movement.
- Opportunities are everywhere. Though exporting is not as glamorous as outright innovation, it certainly got the job done for Mateschitz.
Red Bull’s marketing efforts have certainly been copied, but will they ever be surpassed?