To know me is to know I am on the go from the get-go. I move fast,
talk fast, my ADD has a case of ADD, and have been accused of being
heavily caffeinated. Guilty of all, however, one thing I don’t have is
wings. That has not stopped me from admiring the legions of angels who
do.
Our Marketing Company of the Year: Red Bull.
Even though Red Bull has been credited with inventing the energy
drink industry, they do not sell you an ounce of it. If you look closely
at their marketing, they sell you adrenaline, they sell you action,
they sell you passion. They just happened to bottle it into a small blue
and silver can than contains
taurine. That is one of the most masterful sales in history.
Go to its
Facebook page
,
which is closing on 35 million fans as of this writing, and you will be
hard pressed to find a single picture or a mention of the Red Bull
bottle. As a matter of fact go to their
homepage
and you will also have great difficulty finding a single picture of the
product on such prime real estate. Red Bull marketing does not sell you
drinks. Red Bull may taste like carbonated medicine in a can while
promising physical energy through glucose or a mixture of sugars, but
it’s much more – it’s the most dominating aspirational brand in the
category since Coca Cola.
As I write laying next to me is its lifestyle magazine, to which I
subscribe. That’s right, I do not drink the product, but Red Bull has
captured me and millions of others within its brand attributes.
In-Bound Marketing
In quarter three in 2012, Red Bull sponsored a skydiving jump from
space. The skydive jump for Felix Baumgartner was delayed for weather
reasons on three separate occasions and critics were questioning why
would Red Bull would dump so much money in sponsoring such an event when
their objective is to sell drinks. What critics were not paying
attention to was the legions of followers online during this timeframe.
Red Bull’s marketing strategy was born via an in-bound marketing
strategy of two-way communication and during the period of time when the
launch was delayed amassed a huge social media following. Red Bull’s
Facebook page is currently ranked 41
st, which is ahead of
Starbucks, Harry Potter, and McDonald’s. There is only one beverage
company that is ahead of Red Bull in Facebook rankings: Coca-Cola. It
would be wise to watch its back … In more ways than one.
To answer the question of why, well, for one it broke the record of the most watched live streaming event on
YouTube
with over 8 million people. The previous record you might ask? It was
the London Olympics with an audience of 500,000 concurrent streams. Red
Bull smashed the previous record by a multiple of 16! No small feat
indeed. Then, according to the Huffington Post: besides YouTube, the
jump was shown by more than 40 TV stations and 130 digital outlets. Red
Bull’s Facebook post-jump photo of Baumgartner gained almost 216,000
likes, 10,000 comments and over 29,000 shares within 40 minutes, and
half the worldwide trending topics on Twitter were related to Red Bull.
Do these benefits translate into profits for the company? That is
hard to say since Red Bull is private and does not report its financial
statements; however, it would be a very safe bet to say that the skydive
from the edge of space, the three-peat Constructor’s Championship in
Formula 1, along with Sebastian Vettel’s three-peat Formula 1 Driver
Championships, the numerous Flugtag events, and the tons of other
non-traditional sponsorships cannot have hurt. In fact, it is known that
back in 2010 it sold 4.2 billion cans worldwide with just over a
billion of them here in the United States. That represented a jump in
revenue of 15.8% year over year. What was Coca-Cola’s increase? Between 3
and 4%.
There is no question that Red Bull Marketing is a force to be
reckoned with. I sincerely believe that 2012 will be shown to have been
the inflection point in Red Bull’s meteoric rise to the top. I have said
it before and I’ll say it again, strategy is not about doing things
better, it is about doing things differently. Red Bull has its
headquarters in Austria near Salzburg (birthplace of Wolfgang Amadeus
Mozart) in a town called Fuschl. Not your typical seat of a
multi-billion dollar conglomerate. Yet, there is nothing typical about
Red Bull nor its marketing. Red Bull has thrown the old marketing book
out the window and is writing its own. We should all be so lucky to
peruse it.
How Red Bull Did It
In today’s society, consumers are bombarded with promotional messages
from organizations. Consumers receive these messages when they listen
to the radio, watch television, read a newspaper, commute to work or
simply walk around a city. Effective promotion relies on the message
reaching the consumer in an accurate and timely way. However, there are
so many messages it can be difficult for a business to reach its target
audience. Promotional messages can easily become simply noise. They
crowd the marketplace and make everything more confusing for consumers.
This creates a marketing problem. To address this problem, some
marketers look for new ways to communicate with consumers. They seek to
break the traditional rules of marketing by reaching consumers in
innovative ways.
Dietrich Mateschitz founded Red Bull in 1984 after discovering the
widespread popularity of tonic drinks in the Far East. He developed the
Red Bull Energy Drink, launching the product on the Austrian market in
1987. Since then, Red Bull has launched a range of products, including
Red Bull Cola in 2008 and Red Bull Energy Shots in 2009. Today, Red Bull
has annual sales of around 4 billion cans in 160 countries and employs
more than 7,700 people. Red Bull has a distinctive approach to
marketing: using a progressive marketing strategy. This type of strategy
aims to constantly evolve and develop the brand. This approach allows
Red Bull to engage with consumers using new and exciting channels of
communication.
In recent years social media has become a vital marketing tool for
many organizations. Its increasing popularity, predominantly with young
audiences, has had a huge impact on modern marketing techniques. Digital
and social media campaigns are integral to Red Bull’s marketing
strategy. This case study illustrates how Red Bull uses a range of
innovative promotional techniques to improve the process of
communication and drive consumer engagement and loyalty.
To meet the needs of its customers, every organization seeks a
distinctive marketing mix. This is often referred to as the 4Ps. It
involves focusing on:
- product – the specific features and benefits of the product
- place – where and how the product is sold
- price – setting the right price in each market
- promotion – using the most suitable form of promotion to reach customers
For example, the marketing mix for Red Bull is based around:
- A distinctive product – the taste of the product is unlike any
other, it also has a functional effect in comparison to other soft
drinks
- It is easy to obtain as it is sold in a variety of places – including retail outlets and food and drink establishments
- Red Bull uses a premium pricing strategy. The product is priced
above that of competitors’ products. Consumers will pay a premium for
Red Bull due to the quality of the product and the product’s benefits.
This is reflected in the fact that it is the world’s best-selling energy
drink.
- However, perhaps the most interesting element of Red Bull’s
marketing mix is its approach to promotion. Red Bull embraces innovation
within its promotional activities and as such is able to create a
lasting impression on consumers. The concept behind its promotional
activity is to give people ‘Wiiings’. This translates as pushing the
boundaries of what is possible and nurturing people’s talent so they can
achieve their goals and dreams.
The aim of the promotion element of the marketing mix is to grow the
business and increase market share. Businesses develop a promotional
strategy in order to encourage customers to purchase their products.
Many base their approach on AIDA principles. AIDA is an acronym that is
shorthand for the stages in a sales process, Attention, Interest,
Desire, Action.
There are several traditional approaches to promotion:
Advertising
Perhaps the best known is advertising. This is a key element of what
is known as above-the-line promotion. This type of promotion usually
delivers messages to a wide audience using the press, television, radio
and the Internet. Although this makes it easy to reach a large audience,
it is more difficult to deliver a memorable message that is tailored to
a specific target market. It can be costly: for example, television
adverts at prime time are very expensive. In addition, businesses cannot
completely control who sees or hears their adverts or how they respond.
Red Bull’s above-the-line promotion primarily helps to increase top of
mind brand awareness amongst consumers.
Below-the-line
Below-the-line promotions encompass all other forms of promotional
activity. To reach targeted groups of consumers, Red Bull focuses
heavily on developing inventive below-the-line promotions. Unlike many
businesses, Red Bull does not use traditional sponsorship as a method of
below-the-line promotion. Red Bull takes a different approach. It
creates and organizes its own events around the world. These events
provide a platform for talented athletes to showcase their skills and
ambition.
Sporting events include Red Bull X-Fighters and Red Bull Air Race,
where the world’s top FMX riders and pilots respectively perform
world-class flips, turns and tricks in front of tens of thousands of
spectators. These events help to establish the brand values. They also
begin the AIDA process with the participants and audiences for these
events, creating awareness and interest in Red Bull products.
A key aspect of Red Bull’s promotion is about creating genuine
relationships with individual athletes, such as Robbie Maddison, who was
able to achieve his lifelong ambition when he performed the first ever
motorcycle back flip over a raised Tower Bridge in London. Through
supporting these athletes in pushing themselves beyond their limits, Red
Bull is able to engage with consumers. Red Bull events provide
experiences that excite, surprise and challenge participants and
spectators. For example, events in summer 2011 included Red Bull
cliff-diving in the south of Italy and the Red Bull Flugtag event in
Leeds. Red Bull Flugtag challenges brave and creative individuals to
design, build and pilot their own homemade flying machines off a
30ft-high flight deck. Almost 100 Red Bull Flugtag events have been held
around the globe. Teams are judged on the distance flown, as well as
the creativity and originality of their flight machine idea. They also
win points for their performance during their pre-flight speech to the
thousands of spectators.
Events like these support the brand ethos and contribute to the Red
Bull experience. They are based on a belief that mass awareness can be
achieved without requiring big budgets. In fact, the large-scale
activities, such as the Formula 1 team that is owned by Red Bull, are
not the cornerstone of its promotional strategy. These activities are
focused on building talent and pushing the sport to new levels through
innovation. However, the emphasis is on local activities that can have a
big impact and create interesting media coverage. These have the
advantage that the company can quickly and inexpensively change anything
that is not working. It can repeat or develop ideas that work and seem
to have good public appeal. The program is managed through an annual
activity plan, which is based on a three-year overview of promotional
work.
Pull Marketing
Word of mouth (WOM) promotion is based on the principle of pull
marketing. It relies on the transmission of a positive marketing message
from person to person through conversation or a personal communication
such as email or text message. Pull marketing gets consumers to bring
other consumers to the product. In contrast, push marketing uses
above-the-line promotional techniques to put products in front of
consumers in order to generate sales.
Red Bull extensively uses pull marketing. This approach involves
getting consumers excited about the product and conveying this
excitement to their family and friends. It is also about trying to get
coverage of Red Bull events in the press. This coverage can encourage
consumers to find out more about the product. It helps to generate
momentum through creating interesting stories for people to talk about,
which in turn helps to create brand awareness and grow sales.
The founder of Red Bull used pull marketing to promote his original
product in the 1980s. He hired a Red Bull Wings Team to go out and talk
to people one-to-one about the product. This helps to create consumer
interest in the product. As people experience the drink and appreciate
its qualities, they become advocates for the brand. They share their
opinions with other consumers when they talk with friends. The promotion
therefore creates a ripple effect.
Innovation
Red Bull continues to use this process to reach consumers in innovative ways, including:
Red Bull Wings Team –
The team of students go out on the road in their Red Bull mini to
help launch the product in new markets. The branded mini has a Red Bull
can on the back of it. The team offers a cold can of Red Bull to people
in need of energy to demonstrate the product’s qualities. Through
engaging consumers in a fun, non-threatening way they create a personal
and positive product experience. For example, the Wings Team attended
the 2010 London to Brighton mini run. The team was there for the early
start to offer competitors a cold can of Red Bull.
Student Brand Manager Program –
Individual students help activate a variety of events on campus. They
organize activities around the world to get people talking about the
product and get students actively involved on their own university
campus.
Red Bull Bedroom Jam –
This is a competition to help teenage musicians get out of their
bedrooms and onto the big stage, giving them an experience they may
never have been able to have. Red Bull records bands playing live from
their bedrooms for the world to see via the Internet. The bands that
create the most attention online then compete for long-term career
support and the opportunity to play at festivals and be tour support for
established musical acts. This helps create interesting media coverage
that gets people talking about the brand.
Red Bull Reporter –
This project provides opportunities for aspiring writers, filmmakers
and presenters to report on world-class Red Bull events, giving them the
chance to have their work published in a variety of credible
publications.
These creative and original projects help Red Bull to capture the
attention of its increasingly knowledgeable audience. They aim to build
brand loyalty by creating relationships with consumers.
Digital and Social Media
Digital and social media are core elements for all of Red Bull’s
campaigns. These tools provide direct and relevant lines of
communication with Red Bull’s core youth audience. Facebook, Twitter and
online blogs make it easy for people to exchange information quickly
between themselves. These channels of communication make word-of-mouth
and other pull marketing strategies more effective.
To remain competitive and interact with consumers, Red Bull is
constantly creating new ways of reaching its audiences online. Red Bull
also uses a variety of smart phone applications to promote its
campaigns. These methods create connections with consumers, which
minimize the risk of ‘noise’ affecting the promotional message. Unlike
advertising campaigns, which have to be planned months in advance, the
great advantage of some of the techniques that Red Bull uses is that
they are easy to adapt and refine. Red Bull constantly creates new
methods and techniques to engage with consumers. This is vital in such a
competitive market.
Analytics
For promotions to remain effective, Red Bull has to analyze the
impact of different campaigns. Word-of-mouth promotions can be more
difficult to measure than some traditional methods of promotion.
Although healthy sales are an important measure, Red Bull uses other
measures to evaluate the effectiveness of its activities. For example:
- Setting targets for sales returns from the smaller promotional activities.
- Evaluating the amount of editorial coverage its activities receive in the media.
- Measuring the number of blogs related to Red Bull’s products and the frequency of comment on these blogs.
- Evaluating the online influence of Red Bull activities in the social
media. For example, on Twitter there are around 875,000 followers of
Red Bull activities. On Facebook, more than 35,000,000 consumers ‘like’
Red Bull.
- Conducting an annual brand health-check with consumers to ensure that they like the brand.
Return on Investment
Measuring the outcomes of Red Bull promotions is not just about
return on investment. These figures do not create the whole picture.
This is because it can be difficult to value word-of-mouth promotions on
paper. Sales returns do not take into account other factors such as
longer-term brand loyalty.
As a specific example, the Red Bull Wings Team has proved to be a
very important part of the marketing strategy. When Red Bull has
launched products in countries without this program as part of its
promotional mix, they have not been received as well by consumers.
Red Bull adopts a progressive marketing strategy that is constantly
evolving to push the brand forward. Social and digital media is at the
heart of all of its promotional campaigns.
This type of strategy allows Red Bull to adapt its promotional
activity to reflect technological and social changes, for example, the
increasing use of smart phone applications as a channel of communication
to its audience. Consumers’ expectations are higher than ever, and as
such Red Bull strives to use innovative marketing techniques to reach
its audience.
In short, 6 basic tenets have turned this company into the world’s
leader within the energy drink category and made them
STiR-communications’ Marketing Company of the Year:
- Embrace a sense of purpose
- Beyond Big Society: do more than grow your bottom line
- Move beyond ROI: pitch for emotional impact
- Embrace ‘extreme marketing’
- Behavior trumps brand values
- Place commitment above all things