A rags to riches success story: literally taking the bulls by the horns !!! Red Bull is a 1987 Thai Austrian Success Story !!! Chaleo was a star indeed ! RIP !
Red Bull founder Chaleo Yoovidhya, who grew from humble origins to become one of Thailand's wealthiest men, with a wealth estimated at $5bn (£3.2bn) last year, passed away from natural causes at a Bangkok hospital yesterday at the age of 90.
His pharmaceutical company produced a tonic drink in the 1970s, but it became popular worldwide in the next decade when he went into partnership with an Austrian entrepreneur.
Red Bull also owns two football clubs and a Formula 1 team.
Mr Chaleo was born of poor Chinese immigrant parents in the northern province of Phichit, reportedly in 1932, local media say.He worked as a salesman before setting up TC Pharmaceuticals in 1962.
It introduced the drink Krating Daeng, which became popular with shift workers and lorry drivers. In 1984 he launched it as Red Bull with the Austrian marketing expert Dietrich Mateschitz, and three years later began selling it in Austria.
Red Bull is now sold in 70 countries throughout the world. Forbes Magazine put him equal 205th in its March 2012 world billionaire list.
Chaleo married twice and had 11 children, five from his first wife and six from his second. He was born in a poor Chinese migrant family in Phichit that earned their living raising ducks and selling fruit. His first jobs included being a bus conductor.
Thanks to his perseverance, Chaleo ended up with wealth estimated by Forbes at US$5 billion (Bt153.6 billion) as of March - the 205th richest person in the world and Thailand's third richest. His business products are available in more than 70 countries and it owns a winning Formula 1 team.
Chaleo was a salesman in 1962 when he started a small pharmaceutical firm, TC Pharmaceutical Industries. First producing antibiotics, it made a fortune for Chaleo when Krating Daeng was introduced in the 1970s - and targeted at truck drivers and blue-collar workers. More success followed when he set up a joint venture in 1984.
His partnership with Austrian-born Dietrich Mateschitz 28 years ago took the world beverage market by storm. Mateschitz visited Thailand in 1982 and discovered that Krating Daeng helped cure his jet-lag very quickly.
He approached TC Pharmaceu-ticals with a proposal to market Krating Daeng in Europe, starting in his native Austria. His proposal was accepted and led to the successful launch of Red Bull in the West in 1987. It later became a global brand.
It was 1984, a time when big hair, popped collars and Reaganomics defined popular culture in America. Across the Atlantic, an entrepreneur looking for an energy boost was hard at work on the next big pop culture fad. It took three years of experimenting and hard work; but in 1987, Dietrich Mateschitz and Nina Avery gave the world wings with a new drink called Red Bull.
It begins with a tuk-tuk ride.
Avery and Mateschitz got their inspiration when they traveled to Thailand. They noticed that the tuk-tuk drivers kept drinking something to keep them energized throughout the day. They adapted the Thai beverage known as Krating Daeng, which translates into English as Red Gaur. The proper translation of "Krating Daeng" is "red gaur," a phrase in Thailand that refers to the cattle-like, near-extinct animals found along the Thai-Cambodia border, the Bangkok Post reported. When the drink began selling internationally, "krating" was translated as "bull." Red Gaur eventually became Red Bull. After some changes to the recipe and flavor, the new energy drink was ready for the public.
Mateschitz's native Austria was the first market in which Red Bull was launched. It was a smash. Sales doubled from year to year. In 1994, the partners expanded into Germany, before going global in 1997. When Red Bull hit America, sales hit the roof, doubling every single year since. Last year, worldwide sales were $1 billion. The company hopes to expand into Asia next, starting with Japan.
Do urban myths help propel sales?
Matechitz is known for being a marketing specialist. To say that his strategy is working would be a gross understatement. However, critics of Red Bull say sales are boosted, at least in part, by 'underground' marketing. In Europe and the United States, the drink is not only available in stores but also in bars and pubs. It has a growing reputation as a brand name alcoholic mixer. The myth associated with mixing Red Bull and hard liquor is that it allows the drinker to get a buzz without feeling tired. There are also rumors that the drink has aphrodisiac qualities. This most likely starting because of the name and an association with using bull testicles as a performance enhancer. Executives deny marketing the drink as a mixer or having anything to do with any of the myths. On the other hand, none of these myths are being dispelled.
In the Bull's Eye: The Youth Market
The Red Bull marketing team does admit that their target market is the young and restless. It does a guerilla marketing campaign with Mobile Energy Teams. These teams are staffed mostly with college students. They load a car with Red Bull, show up at events, and hand out free samples.
The company has also revved up its bottom line with licensing. The taurine logo is on the shirts of extreme athletes and racing cars worldwide. Dietrich bought the Formula 1 team Jaguar Racing from Ford Motors in 2004. Now it's called Red Bull Racing. In April 2005 he bought the Austrian football club SV Austria Salzburg. In March of this year, he bought the American soccer club Metro Stars. Both teams are now associated with the energy drink; bearing the names Red Bull Salzburg and Red Bull New York.
Soccer and racing are not the only places where the bull logo has shown up. The company also supports hang gliding, BASE jumping and ice climbing, along with many other extreme racing.The next steps in the licensing scheme include setting up an automobile testing set and partnering with the Austrian army to create an aviation academy. Perhaps the planes will showcase the logo, "Red Bull gives you wings."
Buzz marketing worked for Red Bull.
That's the power of guerilla marketing - an new upstart can out run the big guys with a fraction of the money.
Buzz marketing, also known as "word-of-mouth marketing" "guerilla marketing" or "stealth marketing" is an art of human kind to involve the trendsetters in any community to carry the brand's message, thus creating an interest in, and a demand for, the brand with no overt advertising.
When Dietrich Mateschitz formulated the drink "Red Bull" in 1987 for Australian market, bars initially refused to stock it, seeing it as more of a medicinal drink than a mixer. Lucky for Red Bull, snowboarders and clubbers soon recognized the boost the drink gave them. It was then only a matter of time before everyone else caught on to the popularity.
Red Bull has mastered buzz marketing. Red Bull reps started distributing to only 8 sales territories within the US. If other conventional establishments ask for Red Bull, they put them on a waiting list. This exclusivity in selling their product helped to retain the credibility and uniqueness of their brand. To maintain an established connecting to the snowboarding and clubbing community, Red Bull organized annual music festivals.
Red Bull's first marketing technique was to distribute and target teenagers and college goers. Red Bull went around the cities full of Red Bull cars and distributed the drinks to anybody who need energy - people like construction workers and joggers.
Coke and Pepsi recognized a new segmentation of their market and tried to capture it with large marketing budget. They created energy drinks too, but after millions spent, they were distant number 3 and 4 in the market. Red Bull is still the king of energy drinks with 65% of market and a fraction of their spending.
That's the power of guerilla marketing- an new upstart can out run the big guys with a fraction of the money. All you really need is buzz.
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