“No new product has ever failed this convincingly.”That was the verdict reached by the research firm hired to test a new beverage concept with consumers. Initial results were abysmal. The thin color of the drink appeared “unappetizing.” The sticky texture and taste were “disgusting.” The “stimulates mind and body” concept was irrelevant at best. “Don’t quit your day job,” they advised the middle-aged entrepreneur who sat before them.
But Dietrich Mateschitz was past the point of no return. He had exited the corporate world exactly three years earlier to create Red Bull, a beverage styled after energy drinks popular in Asia. And in some ways, the devastating consumer reactions to the drink were only the beginning of his troubles. Mateschitz was already locked in a drawn-out battle with the Austrian food and drug authorities: Getting approval for the first energy drink in a European country was no easy task. And in the “add insult to injury” category, the friend who Mateschitz had hired to handle advertising couldn’t come up with a single good campaign idea. “Those were the worst three years of my life,” Mateschitz says today.
Of course, Red Bull now holds a place in the marketing hall of fame alongside such enigmatic miracle brands as Hotmail, Palm, eBay, and Starbucks. It beat the odds by throwing conventional marketing wisdom overboard and developing a powerful new go-to-market template.
Red Bull was an innovative—even disruptive—product. It established a new category: the legal, yet “hip” stimulant. And it placed absolutely no importance on taste. (In fact, it’s safe to say that Red Bull tastes like melted gummy bears mixed with cough syrup. The industry blog BevNet gave the drink a generous D+in its initial taste rating.) But that didn’t stop Mateschitz from selling Red Bull at an ultrapremium price point—about eight times higher than Coke—without any higher authority’s endorsement to justify the steep margin.
As you might imagine, an expensive, funny-tasting soda/stimulant hybrid can make for a complex pitch to consumers. But Red Bull’s marketing approach never shied away from complexities.
Posted by Alex Wipperfurth at February 14, 2005 1:17 PM