![[Case Study] How Red Bull Built a Market-Focused Empire](https://www.ama.org/wp-content/uploads/2017/03/What-Gives-Red-Bull-Wings.jpg?crop=295px%2C549px%2C2406px%2C973px&resize=1360%2C550 "[Case Study] How Red Bull Built a Market-Focused Empire")
There is no question that from its inception, Red Bull has been an extremely special company. Admired by an increasing loyal customer base, Red Bull has surpassed being a beverage company to become a lifestyle icon, and has managed to do so by using emotional branding strategies that create deep and enduring bonds between consumers and the brand (Thompson, Rindfleisch, and Arsel 2006) at every touch point. But that’s not all; Red Bull takes a market-orientation and customer experience design approach, radiating the brand from the inside out.
In an increasingly influential Journal of Marketing article, “Creating a Market Orientation: A Longitudinal, Multifirm, Grounded Analysis of Cultural Transformation,” Gary F. Gebhardt, Gregory S. Carpenter, and John F. Sherry Jr. describe market-orientation as a way to build an organizational strategy based on customer insights, desires, and opinions, and further embed this strategy in every aspect of the internal organization. Within Red Bull, every single employee believes that the market is always the raison d’être.
So how could Red Bull achieve such consensus? Using the market-orientation model provided by Gebhardt, Carpenter, and Sherry (2006) to analyze Red Bull’s building process, some valuable lessons can be taken from its success:
Phase 1 Initiation: Initially, the urge to implement change within an organization is recognized by a group of empowered stakeholders. These stakeholders must guide the process of change, fully accepting and embodying the culture they wish to achieve; from top management, the rest of the organization will follow (Gebhardt, Carpenter, and Sherry 2006). Dietrich Mateschitz, founder and CEO of Red Bull, is the personification of this phase as he is the Red Bull brand. He recognized the threat of not having a ‘story’ and customer experience around Red Bull and ensured that his freewheeling spirit disseminated across the entire organization. Mateschitz had a specific vision and fully dedicated the company to it, resulting in Red Bull’s current success.
Phase 2 Reconstitution: The second phase consists of demarcation by being transparent of future plans. After the market-orientation strategy becomes public, the effort turns to value and norm development, reconnecting with the market, hiring believers rather than dissenters, and developing a collaborative strategy (Gebhardt, Carpenter, and Sherry 2006). Red Bull is a brand that is constantly changing and improving. In addition to a high level of professionalism, the company employs people who are passionate and able to raise the bar of excellence. As a result, the reconstitution stage creates the culture, understanding, and processes that lead to the organization’s speedy responsiveness to the target market.
Phase 3 Institutionalization: Organizations must now normalize the informal market-oriented manner into its official culture and organizational behaviour, so that it can implement the market-orientation concept inside out (Gebhardt, Carpenter, and Sherry 2006). Red Bull’s famous tagline “Red Bull gives you wings,” not only implies its external image of helping customers achieve better performance, but also formalizes the core ethos of thrill-seeking experiences and adventure into its own culture.
Phase 4 Maintenance: The final stage requires continuous market connections and upkeep of the market-oriented strategy (Gebhardt, Carpenter, and Sherry 2006). Red Bull continuously engages in renewing and reminding the market of their culture. They are constantly conducting cultural maintenance rituals that include, employee screening and new hires that share the same spirit, field visits with the Red Bull cars, and the sponsorship of new sporting events and athletes. Red Bull creates continuous customer experiences and the sponsored activities associated with the brand continue to grow each year. For example, the Red Bull Stratos (jump back to earth) event in 2012, really reminded the world that Red Bull does indeed give you wings.
Fly with Baumgartner: Red Bull Stratos POV
References
Gebhardt, Gary F., Gregory S. Carpenter, and John F. Sherry Jr. (2006), “Creating a Market Orientation: A Longitudinal, Multifirm, Grounded Analysis of Cultural Transformation.” Journal of Marketing, October 2006, Vol. 70, No. 4, 37-55.
Thompson, Craig J., Aric Rindfleisch, Zeynep Arsel (2006), “Emotional Branding and the Strategic Value of the Doppelgänger Brand Image,” Journal of Marketing, January 2006, Vol. 70, No. 1, 50-64.
The AMA is pleased to partner with Professor Markus Giesler and his MBA students from the Schulich School of Business at York University.
About the Authors
Celine Cnossen, Yuan Li, Neha Sampath, Whitney Taylor-Maisano, and Viktor Tosnev are students in Markus Giesler’s Customer Experience Design MBA elective course at the Schulich School of Business, York University.
