How Red Bull Become a Retail Winner by Rewriting the Rules. REthinking, REimagining and REstructuring Brands in the Era of Retail and Shopper Power

REthinking, REimagining and REstructuring Brands in the Era of Retail and Shopper Power
There are arguably three prime mindsets that determine your winning capability. Starting with the REthink mindset, we need insights and breakthrough research to help us fully understand the shelves we operate on, the competitive framework we compete with and finally the way our shopper interacts with our products.
Once we’ve understood, we need to start REimagining – start creating. Specifically, that means getting our product concepts retail-centric and our retail impacts as effective as possible.
Finally, we need to do things: we need to REstructure – activate our business. We need to create the communities to drive shoppers to our retail operations. We need to create communities that can feed on the impact created during the shopping experience, communities that can grow and constantly relate to our ambitions. But none of this will work unless we activate everyone in our organizations, activate them to live and breathe retail everyday. You may believe you are already covering all these stages – we doubt it! Most organizations do one or two of them and fail to link them. You must not only thoroughly complete them all to reach retail heaven, but you must embrace RETAILIZATION as the guiding philosophy to take you along the pathway.

Red Bull: Rewriting the Rules

‘Don’t quit your day job!’ The market research results were devastating. The thin color of the new drink was totally unappetizing, the sticky mouth feel and taste were deemed ‘disgusting’. And the concept of ‘stimulates mind and body’ was rated irrelevant. The verdict by the research firm: ‘No other new product has ever failed this convincingly.’

It’s worth noting that incremental innovation is not the only way. It doesn’t have to be about incremental development. There are companies that have looked hard and long at the competition and decided it isn’t about incremental change – it’s about a completely ‘new’ competition in a completely unexpected fashion. They not only understood the context – they often changed the context. They even changed the available choice and in some cases brought consumers to a market they never really dreamed they would be in n. They look at the competition and say there’s a new, much better way of doing this.

Sometimes even a better way of communicating our winning strengths. ‘No other new product has ever failed this convincingly’ was the result of a research test on a new energy-giving beverage. That beverage, Red Bull, has gone on to be one of the most successful soft drink launches of recent years and is now a five billion dollar business. It beat the odds by throwing conventional marketing wisdom overboard. It understood the limitations of its own product and the competition and developed a powerful new go-to-market process. It established a new category – the legal, yet hip stimulant – and it ignored the issue of taste and sold the product at a price point eight times higher than Coke. It did all this by rewriting the rules.

It used communications to develop a cult following for the brand over a period of five years. It also understood that context was everything and used the context as its shelf. Wherever people are tired and staying up all night, or otherwise in search of a pick-me up, became the context and the driving force behind all the company’s marketing efforts, from product sampling to sponsoring and hosting events. The often misperceived thing about Red Bull is that it chases cool. What it really does, however, is chase anyone who needs an energy boost. It became cool because of the way it was marketed – not to whom it was marketed.

Red Bull is an example of a brand that finally tipped, when the market created new uses and rituals. ‘It became a mainstream staple as soon as bartenders introduced the Stoli Bully across Europe. The legendary cocktail, comprised of Red Bull and Vodka, was rumored to have the power of ecstasy. Red Bull’s sales force could have never dictated a signature drink to bartenders. But by targeting on-premise distribution at trendy night spots, they were able to facilitate the product usage evolution of its brand by its early market’ .

Lets take a closer look at some of the fundamental differences; at how Red Bull consistently and successfully manages to do the opposite of what everybody else does; how they rewrote the rules:
 Positioning
o Conventional mindset: Create a socially aspiring image
o Red Bull mindset: Create a functional foundation: show how the drink fits into people’s way of life
 Advertising
o Conventional mindset: Advertising launches the brand and stays the lead marketing tool
o Red Bull mindset: Advertising airs only after the launch phase and plays a limited and specific role within the marketing mix
 Targeting
o Conventional mindset: All consumers are created equal.
o Red Bull mindset: Some consumers are definitely more equal than others.
 Distribution
o Conventional mindset: Broad availability is used to create demand.
o Red Bull mindset: Create demand before broadening availability.
 Marketing mix (sampling)
o Conventional mindset: Sampling is all about quantity (reach).
o Red Bull mindset: Sampling is all about quality (much lower reach, yet the experience of a tangible difference).
 Celebrity sponsorship
o Conventional mindset: Celebrity endorsement has a steep price, but gets publicity.
o Red Bull mindset: Pursue those celebrities who are fans of Red Bull, but don’t pay them.
 Merchandising
o Conventional mindset: Keep merchandising in consumer reach.
o Red Bull mindset: Keep merchandising out of consumer reach.
 Network relationships
o Conventional mindset: Vendors are lucky to work for us!
o Red Bull mindset: Treat all stakeholders as partners.
 Corporate leadership
o Conventional mindset: Clear annual volume and profit objectives and fast financial payout.
o Red Bull mindset: Patience and investment.
Of course, the big boys wanted to copy this success, but have so far met with limited success. They lack the spirit and patience of the Red Bull approach – and the communications, let alone the rules

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