Every morning I walk to the local station, being an eighties baby, I grew up watching people buying a coffee to accompany their journey. They would usually stand outside with their drink of choice and a quick early morning cigarette. Roll on 20 years and the image is similar, but 50% or more now have a red bull in their hands instead of the traditional coffee.
Red Bull’s impact in the drinks market has been phenomenal and it’s really interesting how Red Bull came about. The drink was inspired by Dietrich Mateschitz’s trip to the east where he noticed that Koreans were drinking a particular beverage called Krating Daeng and was perceived as giving them lots of energy, he noticed how popular it was and at the time, Krating Daeng was the number one drink in South Korea.
Entrepreneur Lesson 1:
In our humble opinion, great entrepreneurs usually don’t invent things, but they have the vision/foresight to take an idea and make it much stronger.
On the plane journey back, Dietrich, inspired by the drink bought into the company and then rebranded the whole thing, changing the formula slightly and adding more sugar to make it more western and appealing. The product was launched in Austria in 1987. It was not only the launch of a completely new product; it was the birth of a new product category.
Today Red Bull is available in 171 countries worldwide and has sold a cumulative 75 billion cans since it was introduced in 1987 and in 2019 a total of 7.5 billion cans were sold.
Red Bull was not invented by Dietrich Mateschitz, what he was very good at was marketing a product. His company came up with the catchy phrase ‘Red Bull gives you wings’ and they utilised guerilla marketing, the growing bar trend as well as sponsoring edgy events that fit the Red Bull image, from soapbox races to Formula One motor racing.
Red bull became so popular that its influence has inspired popular drinks such as Coco-Cola and Lucozade to mimic the cans that Red Bull created to try and gain a piece of this new market that they completely invented.
Entrepreneur Lesson 2:
Are you clear on your target market needs?
There are many stories historically of companies with great product who have not gone anywhere and companies with bad product who have gone on to be very successful.
In the early ‘80s, there was a video format war between VHS and Betamax. Betamax was the first successful consumer video format, and at one time it had close to 100% of the market. If you talked to anybody within that industry, Betamax was a much more superior product than VHS. However, today most people don’t even know what Betamax is even though it was better quality compared to VHS. Why? Because they did not consider the consumer correctly or market the product well. VHS run by JVC at that time had better marketing and created a lower technology version with bulkier tape that lasted two hours which later extended to a four-hour product instead of Betamax who had smaller, neater tapes that lasted for an hour. VHS was much more consumer-friendly as you could record more than one film. Irrespective of VHS being worse quality than Betamax, people went for the easier formula. JVC centred its marketing around that, letting consumers know that they can do more with their product, thereby winning the video format war, eradicating the better format that many people today have never heard of.
Entrepreneur Lesson 3:
It’s not so much the product but the marketing.
In the mid ‘80s, Nike was losing revenue and the company was in the red for two quarters, sales dropped by $200 million and profits were headed south again. The company was forced to make a subtle but important shift in the market. They recognised that their belief of, if they made the best product, they would always be number one in the market was wrong. Nike conducted a study to check what the public thought of their products, the study showed that the public still perceived that what Nike created was better quality. They then questioned themselves, if they were still making the better product, why were their sales not as good as their competitors and their market share shrinking, while other companies like Adidas & Reebok were overtaking them in revenue. At that stage, Phil Knight discovered the importance of marketing and that Nike needed to change. Instead of putting the product on centre stage, they put the consumer in the spotlight and the brand under a microscope, becoming a marketing-oriented company.
Phil Knight: “For years, we thought of ourselves as a production-oriented company, meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product”
So the question is, as an SME or running your own business, are you:
- Clear on your consumer or target market?
- Do you have a clear marketing strategy?
- At Urban MBA we teach trend marketing, why? Because if you don’t have the resources to create great marketing campaigns, then focus on what is already there
Tips & Examples
- Review your target consumer. What do they like? Where do they hang out?
- Create a marketing calendar – Which features, not just the big events but local and key events, that you can tie into to promote your business?
- Split the year into quarters and pick the big trend or the trends that best suits your business.
- 2020 is a great example, every 2 years there are major events, and this year is the 60th anniversary of the European football Championships and then the Olympics two months later. So how does your SME/company factor into them? Use google to see how others historically have created campaigns around these events
- Plan ahead, the key to all of this is you sit down 6 months in advance to plot your strategy
Urban MBA runs free entrepreneur courses as we believe jobs will be significantly reduced with the growth of technology and AI. To find out more and sign up for Urban MBA free courses visit our website: Workshops