Red Bull didn’t exist 30 years ago. But, in 2015 Red Bull was the world’s best selling energy drink with 5.96 Billion cans sold worldwide. The mastermind behind this marketing coup is Dietrich Mateschitz. He took on the giants of industry like Coke and Pepsi when everyone else thought they were invincible. He did this using three masterful marketing strokes.
- He used positioning to identify and occupy a valuable space in the customer’s mind.
- He used ultra-premium pricing to command respect for his new product.
- He envisioned, designed, and implemented an integrated marketing strategy.
Dietrich Mateschitz’s 3 Masterful Marketing Strokes
Classic Positioning
Red Bull launched over a three year period from 1984 to 1987. A few years earlier, in 1981, Al Reis and Jack Trout had published a landmark marketing book. That book, Positioning the Battle for your Mind, provides a blueprint for positioning.
Their book describes a set of steps that mirror Red Bull’s positioning strategy:
- Identify a valuable space in a the customer’s mind. For Red Bull, the soft-drink category describes that space. Trout and Reis used ladders as a visual metaphor for this which also gave them the concept of rungs. Ladders represent product categories, and rungs represent product’s relative standing in its category.
- Determine how your product is similar enough to share that space. Mateschitz directed changes to the original original drink formula. He added carbonation to syrup-like drink. This made his energy drink taste more like a soft drink and allowed it to share that space in the customer’s mind.
- Describe how your product is different enough to deserve it’s own space. Or describe how your product relates to the original but still belongs on a different rung. Red Bull gave you energy like the original Coca-Cola soft drink from 130 years ago, but Red Bull was better. Red Bull gave you wings.
Mateschitz used positioning to define a unique unique category for his product, the Energy Drink Category. This created space for Red Bull in the mind that made it like, but different than, a soft-drink. If he had stopped there, Red Bull might have ended up as just another soda. But he didn’t stop there. He moved onto pricing.
Ultra Premium Pricing
Pricing sets expectations and high prices can pass prestige to the purchaser. Ultra Premium pricing can create an alluring atmosphere around an otherwise commodity product. Mateschitz leaned on his earlier experience of marketing cosmetics with Proctor & Gamble.
He used the power of pricing to establish a unique category for his product.
If we’d only had a 15 percent price premium, we’d merely be a premium brand among soft drinks, and not a different category altogether. ~Dietrich Mateschitz
He priced Red Bull so it would never have to compete head to head against existing soft drinks. His product cost at least 4 times more than a soft drink, and that made it different in the buyer’s mind. This is the essence of positioning. Red Bull leveraged an existing space in the customer’s mind and carved out a new more expensive one right next to it.
The ultra premium pricing and positioning made Red Bull an affordable, aspirational, product. Coke, Pepsi, and other soft drink manufacturers have to fight for shares of a shrinking margins commodity. Red Bull’s pricing strategy keeps it above the fray. The healthy profit margins helped fuel Mateschitz’s integrated marketing strategy.
Integrated Marketing
It is impossible to separate Red Bull the product from it’s marketing. Mateschitz’s most brilliant work was done during the development stages.
He understood the boundaries product type places on marketing options. He gained his marketing experience creating campaigns for products like toothpaste and shampoo. This taught him about natural links between product and marketing.
Exciting products can leverage exhilarating marketing in ways commodity products cannot. Mateschitz’s needed an exciting product to allow his creativity to flourish. He found that product in Thailand. It was a syrupy concoction that increased energy levels. It tasted horrible, but it worked.
He instinctively drew parallels that others without his experience might have missed. He equated energy with sports and excitement. He worked for three years improving the product and developing the marketing to support the product. His genius ensured that the two were in alignment. Red Bull the drink and Red Bull the marketing were not different things. They were both parts of the same whole.
Both the drink and the extreme action sports leveraged in the marketing spoke to the same target audience.
There’s an authenticity that comes from marketing imbued in a product’s DNA. Red Bull is an exciting authentic product with a loyal following. This wasn’t an accident. It was the result of three masterful strokes of marketing from a master of the art.
Originally Published on HuffingtonPost.com
