University of Southampton
Study Course: Intermediate English for Business
Semester 1, 2004 – 2005

Long Essay
When a brand gets wings
Red Bull′s secret of marketing success

by

Sabine Buchholz

List of contents

1.0 Introduction... 3

1.1 Background... 3
1.2 Thesis statement... 3

2.0 Business success... 4

2.1 Definition of a successful company... 4
2.2 Red Bull’s figures of success... 4

3.0 The marketing concept of Red Bull... 5

3.1 The target group... 5
3.2 Image creation... 7
3.3 How to maintain success in the future... 7

4.0 Conclusion and how to maintain success in the future... 9

Abstract:

The high energy drink Red Bull has been profitably sold since 1987. The company’s figures confirm its success around the world. Red Bull’s secret is an extraordinary marketing consisting mainly of the organisation of fun sport events to create a cool image and make teenagers loyal costumers. With this unique concept the enterprise will go on governing the growing energy drink branch.

1.0 Introduction

Everybody knows it: Red Bull, the silver-blue canned energy lemonade. But the ‘animally’ beverage is much more than a caffeine-loaded drink. Meanwhile, the brand, which was founded by the Austrian Dietrich Mateschitz in 1987, has become a billion-dollar trademark.

1.1 Background

22 years ago, the basic idea was developed in Hong Kong: Advertising expert Mateschitz was travelling on official business, and, in the bar of a hotel, got to know the traditional and stimulating “tonic-drinks”. As he had never seen a beverage like this in Europe, the product left an impression on Mateschitz. Only two years later, 1984, the Austrian founded the ‘Red Bull GmbH’,¹ refined the taste of his drink, developed a unique marketing concept, and first launched the functional product in his home country in 1987. Mateschitz had created a totally new division of the lemonade branch, namely the energy drink. He already expanded to Hungary in 1992. Red Bull not only gave wings to its consumers, but, moreover, got wings itself. Right from the start, it went especially well with young clients (Nimmervoll, 2004). Nowadays, the corporation is one of the most successful companies of whole Europe, and according to the official Red Bull website (2004), “Today, Red Bull is energizing over 100 countries around the globe.”

1.2 Thesis statement

As the business story of the Austrian company is so extraordinary and outstanding in many respects, this report aims at evaluating the extent to which Red Bull’s marketing strategy has been successful. First, a brief non-specific definition of business success shall be given, which, subsequently, will convert into an analysis of the winning strategies of the company in question, Red Bull. Finally, a conclusive suggestion how the corporation should run their marketing in the future shall be made.

2.0 Business success

2.1 Definition of a successful company

Of course, the success of a company can simplest be read of from (financial) figures like the market value, the workforce, the sales, pre-tax profits, the annual growth of business, and dividends per share, as well as product and sales breakdowns. Simplified, the rule is very easy: The bigger the profits, the bigger the success of the company. What is more, the independence from investor’s money makes a business autonomic, and, consequently, more winning. How about Red Bull concerning business figures? This is to be examined next.

2.2 Red Bull’s figures of success

Doubtlessly, the world’s number one energy drink and category founder Red Bull is an extremely lucrative business. But how exactly can the success of the company be defined and illustrated?
Although the canned drink is the only product the company produces, although they sell it in very small portions only, and although these mini-cans have an exorbitant price, the prestigious, functional drink can record an enormous number of loyal costumers aged between 15 and 25. This is especially remarkable as that target, usually, is neither a highly faithful costumer group, nor has it great financial means at its disposal. And yet, the company has been noting down incredible trading profits for many years. Correspondingly, the following expressive figures illustrate clearly what a strong business the Red Bull GmbH is: Meanwhile, an annual sell of more than one billion cans of Red Bull in more than 100 countries is registered, and the PLC progressively and successfully targets new markets all around the world: In the last year, they could gain an increase of profits of 41 percent in the USA, of 53 percent in the Middle East, of 44 percent in Australia, and even of 328 percent in Central America. Thus, Red Bull had a turnover of 1.261 billion Euros in 2003 (Nimmervoll, 2004). In addition, Seiser (2004) reports that Red Bull can afford to put not less than 30 percent of their profits into the marketing sector. All in all, Mateschitz’ corporation has a company value of 4 billion Euros and provides work for about 1,850 employees (Nimmervoll, 2004).
What is more, Red Bull is a private company. This means that Mateschitz’ and his team are free of financial pressure from investors and board members (Rodgers, 2001). All these features clearly signify Red Bull’s immense business success and guarantee Mateschitz’ corporation an undisputed market and brand leadership.

3.0 The marketing concept of Red Bull

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1 A ‘GmbH’ is the German equivalence to a private limited company (PLC).