Case Study: Red Bull Wins the “Extreme” Niche

Photo of a can of Red Bull "energy drink."

Background

Red Bull is an Austria-based company started in 1987 by Dietrich Mateschitz that sells one product: an energy drink containing taurine (an amino acid) that’s sold in a slim, silver-colored 8.3-ounce can (shown at the right). The drink has been an enormous hit with the company’s target youth segment around the globe. For the year 2001, Red Bull boasted sales of $51 million in the United States alone and captured 70 percent of the energy-drink market worldwide. From Stanford University in California to the beaches of Australia and Thailand, Red Bull has managed to maintain its hip, cool image, with virtually no mass-market advertising.

Red Bull’s Targeted Approach to Marketing

Red Bull used Collegiate Brand Managers to promote the drink via free samples handed out at student parties. The company also organized extreme sports events—like cliff diving in Hawaii and skateboarding in San Francisco—to reinforce the brand’s extreme, on-the-edge image. Their grass-roots approach to reaching the youth market worked: “In terms of attracting new customers and enhancing consumer loyalty, Red Bull has a more effective branding campaign than Coke or Pepsi,” said Nancy F. Koehn, author of Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell. Red Bull’s success has also gained attention (and concern) among beverage-industry giants, and some have tried to follow its lead: For a time Coke ran a stealth marketing campaign, packaging its cola in a slim can reminiscent of Red Bull and offering it to customers in trendy bars and clubs in New York City.