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February 15, 2005

Excerpts: Brand Hijack - Part III

By: 800-CEO-READ @ 1:02 PM – Filed under: Management & Workplace Culture

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 its also difficult to imitate because Red Bull fundamentally changed the go-to-market model. Thats why its 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 drinks 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 Bulls second market (after Austria, where it is headquartered). When it did, Germany became the foundation for the brands 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 companys 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.
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