Red Bull: The Magical Journey By A Marketing Maverick.

Red bull was never meant to be the fizzy energy drink we consume today. Initially, it was (is) a tonic called Krating Daeng available in Thailand. It was primarily consumed by long-distance truck drivers or blue-collar workers.

Dietrich Mateschitz (DM), an Austrian business professional was working with ‘Blendax’ (later acquired by P&G) as a marketing director. He frequently travelled to Thailand for work. This tonic was his go-to drink to deal with jetlags and pull off all those important meetings throughout the day.

DM was done with climbing the corporate ladder. Those suits and ties did not excite him anymore. He once said, "All I could see was the same grey aeroplanes, the same grey suits, the same grey faces... I asked myself whether I wanted to spend the next decade as I spent the previous one." He was looking for challenges in life and found one when he read in a newspaper that a similar energy tonic named 'Lipovitan' was one of the top taxpayers in Japan. He saw potential in this drink and was confident that he could make it big in the European markets.

He then reached out to Chaleo Yoovidhya (owner of Krating Daeng) for a business partnership. Yoovidhya was impressed with DM’s background and the proposal he put forth. They agreed to invest 500,000 $ each and keep 49% stake respectively with the remaining 2% going to Chaleo’s son Chalerm. Technically, he gave up the controlling stake, though they agreed the company will be run by DM. He quit a well-paying stable job at 40 to fly high! 

He started with an R&D facility in Austria in 1984. The first challenge was to make a drink that Europeans will like. After multiple tweaks, they finalized on a carbonated yellow syrup with a sweet taste termed as ‘acquired’.

It was time to get the packaging and branding in place. DM approached his university friend Johannes Kastner who owned a small ad agency in Frankfurt. 18 months and 50+ designs later, they finally approved the packaging in blue & silver colours with the big red logo popping on the front side. But for the slogan, nothing would impress DM. Johannes almost gave up trying, but DM insisted him to try one last time. That night, at 3 AM Johannes came up with ‘Redbull gives you wings’. That was it! Home run!

 Krating Deang was now Redbull!

To test the waters first, DM hired a market research agency. They began the sampling and feedback process. The results were completely opposite to DM’s expectations. People found the taste and name both weird. What a disaster! Right? He could feel demotivated and give up that very moment to re-join the MNC. But there was a reason he chose this over the 'grey' life.

DM came up with another proposition. He knew his product was different. He envisioned it as a PREMIUM drink. The marketing genius decided to play on the price strategy. He priced Red Bull 3X more than other drinks. He was also firm on not sharing the shelf space with any other drink. The taste, name, packaging remained unchanged. What changed was the approach and the marketing strategy!

Instead of marketing it as a drink for working-class people who slogged long hours; he positioned it as an upscaled drink. And there comes the first association of Redbull- The Formula 1! F1 Racing was a popular sport in Europe. Redbull signed its first athlete, a charismatic Austrian racer, Gerhard Berger. This was just the beginning of what we can call the marketing heaven created by Red Bull.

Red Bull spotted its niche. Their sleek marketing strategy targeted young professionals and college students. They distributed free cases to college students under the campus ambassador program to make the brand integrated with youth. This strategy was highly successful with immediate or gradual results.

They decided to actively sponsor extreme sports. Many young aspirants could treat it as a mainstream career because of Redbull’s support. One can say they established this category. Redbull also created offbeat/fun events like ‘Flugtag’ and ‘soapbox’ to catch the customer’s imagination. Such events attracted over lakhs of spectators (the world record is of 220,000 spectators in Capetown in 2012).

The videos of these sponsored events went viral with the surge of youtube. Today, Redbull has 9.5 million subscribers to its youtube channel! Eventually, Redbull moved towards owning properties. In 2007, Red bull set up an in-house production company- The REDBULL MEDIA HOUSE! What we call ‘content marketing’ today, was adapted and practised ahead of the time by Redbull! Most of their content garnered millions of eyeballs without having to spend a dime in media buying. i.e. Felix Baumgartner's jump from the space was distributed for live telecast to 80 partners in 50 countries which got 50 million live tv views, and 45 million youtube views.

What started as marketing interests became a source of revenue for the company. Redbull owns teams across Motorsports, Ice hockey, Esports and Football. They also have promotional cars and aeroplanes.

Reportedly, Red Bull spends 30-35% of the revenue on marketing. They thrive on the wheel of marketing ultimately revolving around 'Word Of Mouth':  

What looked like a folly product at the beginning, turned out to be a masterstroke! Red Bull created history by establishing a CATEGORY with the help of a core focus on sports marketing.

As of Today, 

1. Redbull has an active presence in 171 markets compared to 1 in 1987
2. Has sold over 75 billion cans since its inception. Redbull’s revenue in 2019 alone was 7 billion euros 
3. Is sponsoring 1205 athletes across 97 disciplines And, Is associated with over a thousand events across 90+ disciplines annually. 
4. Dietrich Mateschitz is the richest Austrian with a net worth of 25.4 billion USD. His partner Chaleo passed away in 2012, his son Chalerm is worth 20 billion USD
5. I have paid for 100 times more cans than freebies! ;)

 P.S.- There is a further backstory to Krating Deang. Chaleo Yoovidhya was born to poor Chinese immigrant parents. He had little formal education. Worked as a salesman with a pharma company, later set up his own company called TC pharmaceuticals. In 1976, Krating Daeng was introduced. Soon it became a preferred choice for blue-collar workers and gained a household name in Thailand.

Also, Krating Daeng's literal meaning in English is Red 'Gaur' or 'Bull'.