Is it okay to stick at nothing for success?

The last two weeks I focused on Red Bull and it’s marketing. While I described Red Bulls marketing in general two weeks ago I pointed out three things to learn for Red Bulls Stratus Project last week.

Red Bull Gives You Wings

When most of the people think of Red Bull they see an energy drink, bulls, football clubs or sport events in front of their eyes. The image of the company is absolutely related to extreme sports. Therefore the well-known slogan “Red Bull gives you wings” fits perfectly. Experts categorize Red Bulls marketing as extreme marketing. But doesn’t extreme mean that there have to be victims?
Hermann Strittmatter, founder of the agency GGK Zurich, Red Bulls extreme marketing has obviously taken victims. The first one was Eli Thompson, who died when he crashed into a mountain with a wing suit. The purpose of his was of course, to produce a Red Bull movie. The second victim was Ueli Gegenschatz who died when his Red Bull sponsored BASE jump in Switzerland was not successful.
He argues that: “The accidents are results of the perversions of event marketing. This time Red Bull went too far”. The Swiss magazine accuses Red Bull to have a marketing strategy of “Break a leg”. Overall, Strittmeier beliefs that “Red Bull acts irresponsible.”

“The risk is obvious”

On the other hand, globali who left a comment on kleinezeitung.at insits, that “every one who does extreme sports knows the risk”. According to him, “an accident like the one of Gegenschatz would not have gotten that much attention if Red Bull did not sponsor it.” He thinks that everyone who does extreme sports and finds a sponsor like Red Bull is lucky because “he does not have to pay for mobility and material.”

“Everyone is responsible for his own life”

My own view is that, while it is true that Red Bulls marketing strategy should be observed very critically, everyone is responsible for his own life. Red Bull does not force anyone to jump out of a plane if he or she does not want that. In sum, I would argue that we cannot blame Red Bull for the death of these two guys even it is very sad. They made the decision to jump and they knew which consequences could result.

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“That awkward moment when you realize an energy drink has a better space programme than your nation”

Exactly one week ago Sebastian Vettel won his 3rd Formula 1 world championship title in Sao Paulo. After one of the most exiting races in history he reached the finish line as the 6th car and ruined Fernando Alonso dream of still winning the championship somehow. But instead of being enthusiastic of Vettels three titles in a row some competitors only treat Vettel with respect. But why? The answer is pretty simple and equal to many other situations in life: Money. Vettels team RED BULL has the highest seasonal budget and therefore the best team and technology.

This is just another great picture that illustrates the marking of the Energy Drink seller Red Bull. A company that has nothing to do with racing wins the most important Formula in the world. Another example is Red Bulls latest coup that caught the words attention: Felix Baumgartner’s Space Jump. A guy jumps from the edge of the world for scientific reasons and an Energy Drink seller sponsored all of that. A tweet described it as “That awkward moment when you realize an energy drink has a better space programme than your nation.”

Vettel Gangnam Style

Vettel Gangnam Style

An Air Race without Red Bull signs? Impossible.

But what can we learn from Red Bulls obviously great Stratos-Project- Marketing? For Nicola Kemp, a professional blogger on marketingmagazine.co.uk, the first lesson is the final purpose: “Red Bull Stratos has not only underlined the brand’s authentic link to extreme sport and innovation, it has also provided its employees with a motivation bigger than selling sugar water (or energy drinks for that matter) for the rest of their lives.” People built connections between extreme sport and Red Bull in their heads. An Air Race without Red Bull signs? Impossible.

Her second derivation from the Stratos Project is that companies should not only look on their own advantages but even more on societies fortune. The projects purpose was, besides the marketing factor, to deliver important data for scientists and NASA. People like that and it makes a company look trustworthy.

Felix' Baumgartners Space Jump

Felix’ Baumgartners Space Jump

“The message is clear: to be truly great, brands must transcend ROI”

Point Number three: Take a stab back. Nicola Kemp beliefs that the Energy Drink producer didn’t want the event to look like a marketing event: “In fact, Red Bull itself has blocked agencies involved in the project from talking to the press because it doesn’t want the event to be viewed as a marketing stunt.” James Kirkham, managing partner at Holler, insisted that for some people the event created something like an “I was there moment”. This is great for the company and without being totally presented as the initiator of everything people built a likeable connection to Red Bull. For Nicola Kemp: ”The message is clear: to be truly great, brands must transcend ROI”.

Overall we can conclude that Red Bull taught the world another great marketing lesson. The Red Bull Stratos project pushed marketing innovation forward into another dimension. From today on, marketing is not only supporting aids research and social projects; it’s also delivering space jump data to the NASA.

 

RED BULL everywhere you look and go!

It was a beautiful spring day in 2009 – the 19th of Mai to be more appropriate. The huge energy drink seller Red Bull released its coup called RB Leipzig. What is RB Leipzig? RasenBallsport Leipzig is a football Team that currently plays in the fourth league in Germany. The special thing about the club is that Red Bull already invested millions into new players, a new performance centre and professional structures. Therefore the club is quite successful and made up two leagues since the foundation in 2009. But the project in Leipzig is only one of many Red Bull Projects. The energy drink company owns a very successful Formula 1 team and several other football clubs in Austria and in the United States. It supports almost every successful extreme sport talent world wide, host’s air races and employs fancy DJ’s.

“Red Bulls 8000 employees world wide work in the marketing or sales department”

It seems like everywhere you go you see Red Bull signs. Marketing all over the world, in each and every country, in every modern club or restaurant. According to JÖRN KABISCH, economic editor at freitag.de: “Red Bulls 8000 employees world wide work in the marketing or sales department. The production of the bottling of the drinks is made by extern companies.”

An analysis of the economic magazine “brand eins” states “Red Bull spends 1 billion euro yearly only on marketing while the production cost amount is 600 million euro.” That led me to the questions: Does this advertisement effort make sense? Red Bull spends so much money on promoting the product everywhere but do they generate enough profits?

”Red Bull uses 30% of its yearly revenue only for marketing”

Jörn Kabisch quotes that: ”Red Bull uses 30% of its yearly revenue only for marketing. This is a lot. Only food producers like Nestle or Beiersdorfer invest an equal percentage.” But the most important thing about Red Bulls advertisement strategy is that people a ready to pay up to 2,50€ for one bottle of Red Bull. Kabisch insists: “After deducting the costs of production Red Bull has a profit margin of 70%. There is no comparable drink producer.” The advertisement is also responsible for Red Bulls huge growth over the last 20 years. “Since the release of the product in 1987 Red Bull only had binary growth rates.”

In the first place we can conclude that the companies advertisement is essential for its success. But how much profits are there actually? A view on Red Bulls balance sheet tells us something about 311,2 million Euro in 2011. Since 2011 the company does officially not have any debts.

WOW! A totally healthy company!

But while the profits are increasing this year there was a time in 2010 when sales decreased. Kabisch already predicted that: “Red Bulls golden times are over”. From today’s point of view we can say that he was wrong. What many people don’t know is that the energy drink producer owns over 70 different other companies all over the world. The popular health drink “Carpe Diem” is one of them. So even if sales should sustainably decrease one day … by that time Red Bull will have a supporting leg with a huge marketing support …