February 18, 2005
Brand Hijack - Part VIII
ME-TOO MARKETING TANKS
With the success of Red Bull, the big boys—Pepsi, Coca-Cola, and Anheuser-Busch—jumped on the energy drink bandwagon. All three companies tried to copy Red Bull’s low-key marketing approach, but so far have met with limited success.
What could possibly go wrong? Plenty.
They went for a top-down approach instead of collaboration.
Instead of seeding their brands slowly within relevant subcultures, KMX (Coke) and 180 (A-B) entered the alternative music and sport scenes in the traditional marketing manner: as sponsors. Here is what one attendant wrote about an Area One concert:
There were people all dressed in orange promoting a new energy drink called KMX, and offering free samples to everyone in little test tubes. They were everywhere!
The big companies haven’t tried to earn their communities’ adoption of the drinks. They’ve tried to buy it. And so they haven’t been as effective as Red Bull, which used marketing tactics that sometimes took years to unfold in order to garner the long-term loyalty of its consumers.
[Like I said in the intro, I ran out of room to cover the whole case (I get 2000 words on excerpts). The other headings that Wipperfurth uses in this section include "Chasing 'cool', but ignoring function", "They haven't been honest with the customers", and "They try to maintain too much control".]
February 17, 2005
Brand Hijack - Part VII
It always offers the product in context.
After being told that his product was a complete failure among consumer testers, Mateschitz walked away with a key lesson: Context is everything. Small wonder the product had failed in the sterile environment of a research studio. Red Bull didn’t need to be tasted; it needed to be experienced. Just as Gatorade only succeeded in taste tests when participants were dehydrated and the drink was served ice cold, Red Bull would never score high points with consumers in a lab setting. RedBull was at its core a functional drink, intended to provide a boost of energy. And so it had to be delivered within the context of fulfilling that need.
Instead of launching a mass marketing campaign or blanketing the airwaves with commercials, Mateschitz went with what traditional marketers call a “below-the-line” approach. Since Red Bull needs to be experienced in the right context—wherever people are tired, staying up all night, or otherwise in search of a pick-me-up—creating that context became the driving force behind all the company’s marketing efforts. To this day, from product sampling to sponsoring and hosting events, Red Bull fanatically sticks to this agenda.
Here’s a dramatic example from the early days, before the company had written its go-to-market guidebook. One day, the German field manager discovered a dangerous misstep: Red Bull had started offering samples of the beverage out of plastic cups in supermarkets. She abruptly quit her job. When Johannes Kastner, head of Red Bull’s ad agency, heard about what had happened, he immediately reinstated her. He then codified the brand’s sampling guidelines to ensure that the drink was only sampled in the appropriate context. For example, Red Bull could never be served in cups, but only handed out as unopened cans so that consumers could decide when and how to drink it. Also, it could only be sampled in places where its function as a stimulant would be appreciated, such as bars and sporting events.
February 16, 2005
Brand Hijack - Part VI
It defines itself by its function, not its image.
Here’s the big idea: Red Bull is a drink that actually does something. The company has never backed off its initial claim that the drink provides a quick boost of energy. (Note: It’s up for debate whether Red Bull actually works in a unique way or not. Nutritionists argue that Coca-Cola’s combination of sugar and caffeine produces the same short-term effect. But that’s not the point here.) This claim—the sort of thing usually confined to the over-the-counter pharmaceutical category—is always at the heart of its marketing. Red Bull embodies energy and stimulation in everything it does.
Fundamentally, Red Bull was one of the first modern brands to turn away from an aspirational image. This was a daring maneuver considering that Mateschitz wanted to compete in the soft drink category, a place where image—particularly a shallow aspirational image—rules. But Mateschitz didn’t want to market Red Bull as just an OTC nutraceutical, either. So he set up a marketing template that showed how the drink fit into people’s lifestyles: Never let consumers forget the message that Red Bull actually works, when they need a boost.
Brand Hijack - Part V
It uses traditional advertising in a very limited way.
Mateschitz learned in the pre-launch years that advertising would play a very specific and limited role in the marketing of his complex brand: It is used to reinforce, not introduce, the brand experience. Red Bull only aired ads after the launch phase, and they remain a small part of the overall marketing mix.
Initially, Red Bull’s agency, led by Johannes Kastner, could not even come up with an idea for an ad campaign. But once they realized that the ads’ only purposes were to build brand awareness and likeability— and not to do the overall marketing job (i.e., establishing and increasing the understanding and acceptance of the energy drink category)—the task became much easier for the creatives.
In a now well-known last-ditch effort, Kastner’s team came up with the “Red Bull gives you wiiiings” campaign. The odd cartoon with a problem/solution message has been run consistently since 1988 on TV and radio throughout the world.
The company is also clever about the more subtle aspects of media planning. For instance, the brand stays off-air during the peak summer months, when share of voice would sink significantly anyway. In order to reach the right audience, its media planners focus on progressive and innovative TV and radio stations. Also, Red Bull doesn’t use print media to convey its brand message. The flatness of the medium doesn’t connote energy, which is the key Red Bull message.
February 15, 2005
Brand Hijack - Part IV
Thanks to the boycott and long FDA approval process, Red Bull became not only cool, but also a hotbed for rumors, urban myth, hype, and anticipation. The company itself wasn’t prepared for the consequences; it ran out of product within the first three months of its German launch. And yet this only served to send yet another positive signal to the market: The sellout alerted the mainstream to the Red Bull craze. Soon, more and more people were jumping on the bandwagon.
As the drink spread to other markets, its reputation came with it. By 1995, London newspapers were telling tales of a financial district “fueled on Red Bull,” and reporting a surge of Red Bull–addled bar fights and vandalism. The company execs resisted the temptation to release widespread denials. It wasn’t until a bogus medical report claiming the drink caused insanity began to spread on the internet that Red Bull released detailed evidence proving the drink was safe.
Causes insanity? Legal speed? Made from bulls’ testicles? Obviously, this stuff is too good to have come from the agency offices on Madison Avenue. Red Bull’s early consumers have their fingerprints all over the company’s public persona. But that doesn’t mean the company just got lucky. Leadership had the wits to let the rumors fly, to not answer the boycotting moms with fervent denials, and to encourage its target consumers to believe what they wanted about the product. In his 2001 article “Liquid Cocaine,” Salonjournalist Jeff Edwards concluded, “The more rumors of Red Bull’s potentially dangerous, over-stimulating effects spread, the more the drink sells.” He credits this “cultivation of mystery” with earning Red Bull its cultlike following.
Even folks at headquarters enjoy playing into the myths. “I always have to fly to Pamplona to source bulls’ testicles,” jokes Mateschitz. “Those rumors have never hurt,” he adds joyfully. (FYI, taurine was found in bulls initially, but it has long since been produced synthetically.)
Brand Hijack - Part III
A BULL ENTERS THE BEVERAGE MARKET
Although Red Bull sets the gold standard in terms of how to launch innovative food and beverage brands, its magic sauce never really has been identified. Nor have the large bureaucracies of its conglomerate competitors managed to mimic its success. This is partly because Red Bull is understandably hush-hush about its strategy. Why give away the farm and let competitors in on your intellectual capital? Red Bull has refused to enter industry competitions such as the prestigious IPA Effectiveness Awards, which require a thorough description of marketing efforts. It also has successfully avoided being the subject of any thorough case studies. But it’s also difficult to imitate because Red Bull fundamentally changed the go-to-market model. That’s why it’s worth a closer look.
How has Red Bull become one of the most remarkable brand success stories of the modern era? It has rewritten all the rules.
It serves up an intoxicating cocktail of rumors, hype, and reluctant denials.
Before the company could ever sell a drop of the stuff, the drink’s ingredients needed approval from local food and drug authorities in each market. In several instances, the harmless but unusual main ingredient, taurine, slowed this process and resulted in a waiting period. As frustrating as that may have been for Mateschitz, the waiting period turned out to be ripe for generating rumors.
It took five years for the company to gain permission to export into Germany, Red Bull’s second market (after Austria, where it is headquartered). When it did, Germany became the foundation for the brand’s success and the cash cow for further expansion. But a black market started flourishing in Munich, which is close to the Austrian border, long before the approval process concluded. During this time, consumers started asking intriguing questions: Why was the drink illegal in Germany? Was it speed-in-a-can, a legal drug? Was its taurine extracted from bulls’ testicles? Was Red Bull an over-the-counter Viagra? The list of innuendos and insinuations went on and on. Rather than trying to squelch the rumors, Red Bull shrewdly added a “rumors” section to its Web site to keep the mythology growing and evolving.
Red Bull has moms to thank for further contributing to the hype. Once the product finally launched in Germany, a group of concerned mothers campaigned to have it banned, claiming that the drink was associated with drug use. The product did happen to launch just as all-night raves and Ecstasy consumption were entering mainstream awareness. Red Bull was well stocked in clubs, where it became the drink of choice for ravers looking for non-alcoholic fuel. The company’s marketers encouraged this association by sending subtle cues, like tossing empty Red Bull cans onto the floors of club bathrooms. They cleverly realized that drug culture cachet combined with parental meddling was an instant recipe for cool. As authors Pountain and Robins point out in Cool Rules: “Kids want simultaneously to be acceptable to their peers and scandalous to their parents.”
February 14, 2005
Brand Hijack - Part II
“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.
Brand Hijack - Part I
Brand Hijack: Marketing without Marketing
by Alex Wipperfurth
Portfolio - February 2005
288 Pages - ISBN 1591840783
Wipperfurth has the best case study I have seen on Red Bull. I don't have enough room here to excerpt the whole thing. So I will give you a taste and let you know that the case itself is enough reason to go buy the book. You'll find the analysis in Chapter 4.