High Octane Marketing

Volume 14 Letter 7

To intimidate Coca Cola you had better be good…..and Red Bull is! Red Bull dominates the energy drinks market like no other. It was developed by an Austrian entrepreneur who based the drink on a similar product he discovered helped to cure his jet lag on a trip to Thailand. Red Bull officially launched in 1989 in Asia followed by Europe in 1992 and then the USA in 1997. While the official slogan, “Red Bull … Gives You Wings”, is well known, it’s the public acceptance of the beverage that has launched product sales sky high, selling 40 billion cans of the high octane concoction per year. Even so, it’s the management of the brand strategy – the market segmentation and positioning that most fascinates.

Remember, before you can effectively position a product you must first segment the market. Red Bull purposely targets the “Y Generation”. This segment is tired of the classic marketing strategies and can be characterized as symbolic of rebellion against the older generation, i.e. Coca Cola. With this segment in its sights, Red Bull’s positioning strategy speaks directly to ‘Gen Y’ and re-enforces this rebel attitude by associating itself with high octane activities like Formula 1 racing and other high profile extreme sports. However, the actual marketing tactic is really social media on steroids. Red Bull has established “Wings Teams” in their major markets. Wing’s Teams are typically made up of young, energetic generation Y’s with a primary goal of establishing a relationship with customers at extreme sporting events and often using social media and talking with them about the controversial product.

And yes, of course, the product is controversial. Because of the ingredients, Red Bull was banned in France and Denmark until 2008 but all of the controversy and negative press just fed into Red Bull’s desired image of rebellion and living on the edge.

Red Bull is a great example of successful business strategy – good market segmentation, customer segmentation and awesome product positioning. What can we learn from Red Bull:

  1. Segmentation is key: Finding the group or groups who will most highly value your product or service is vital. ‘Wings’ teams can be found at ski hills, wake board and mountain biking events and anywhere the word “extreme” and “sport” collide because this is where Gen Y’s will be.
  2. Establish a relationship with your core customers: ‘Wings’ teams may participate in some of the sports but their main role is to interact with their target clients getting their opinions and views about the drink.
  3. Establish one market before moving onto the next: Red Bull waited to establish their market presence before moving to their next geographical market. Red Bull started in Asia in 1989 and waited to move into Europe and then North America.

Red Bull owner Dietrich Mateschitz was quoted as saying that “Marketing is a simple job requiring only a clear mind and bright eyes. Perkiness is the only prerequisite. Everything else you can learn quickly.” Obviously he learned it very well!

1. Forbes Asia June 2013, The Wind Behind Red Bull’s Wings By Nitin Pangarkar and Mohit Agarwal

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