How to eat a rival’s toast by going one step further in sponsorships.
For decades Coca-Cola has established itself as the great brand that it is, among other things, due to its omnipresence and creativity in sports sponsorships.
However, in the mid-nineties, one day, a small Austrian company called RedBull arrived that began to grow rapidly thanks mainly to its sports sponsorships, exactly the land where Coca-Cola until that moment reigned without rival.
Such was its growth, that when CoCa-Cola wanted to realize it, RedBull had already taken on such a large size that its purchase became unaffordable. Confident in its economic power and especially in its dominance of retail and the Horeca channel, the Atlanta company was sure that with its Burn brand it was going to dominate the Austrian bull and take over the leadership of the burgeoning energy drink sector.
The typical arrogance of ocean liners in front of what they consider simple speedboats, made the directors of the American giant underestimate the rival and not realize, that no matter how Coca-Cola they were, they were not going to be able to defeat RedBull, trying to do the same at the level of sports sponsorships. And so it was, despite all the power of its distribution channels and advertising campaigns, Burn never got off the ground, nor threatened the throne of the benchmark of energy drinks.
Many more tried, trying to replicate and improve RedBull’s giant leap in Marketing. We saw the attempts of companies also of Austrian origin such as PowerHorse, others such as Rockstar (now owned by Pepsi) and an endless number of brands of origin and seriousness of the most varied as Hype, TNT, Leopard, Rich, etc.
None of them succeeded until Monster appeared. A brand that just emerged in 2002 from a traditional Californian juice company, which today with 38% of the world market share, is on the heels of the Austrian Red Bull, which continues to be the world leader in the segment with 42%.
What did Monster do that the others didn’t? Has RedBull rested on its laurels? In reality, RedBull is still tremendously profitable, but its growth figures are much lower than those of Monster, which with a product with a very similar flavor and content, the only thing they did was base a strategy on three apparently very simple pillars, but as it turned out very effective. They were the only ones among many who knew how to play the key!
As I said at the beginning of my reflection, I think the big secret was in their sponsorship strategy, where they did not do anything really innovative, as they followed a strategy similar to RedBull’s, but with a few key nuances where the clear premise of being a turn of the screw more transgressors. Let’s see some examples:
- Monster bets on motor sports, eSports. While RedBull is much more diverse and focuses on any sport where there is risk and action, Monster affects more in transgression, in athletes and even in controversial territories like the UFC with Conor McGregor.
- RedBull does not use stunning girls for their promotions and when they did use them let’s say they did it in a more subtle or elegant way.
Living in controversy and sometimes promoting the role of ‘bad boy’ in their sponsorships, undoubtedly has been a fundamental cause to cement their unstoppable rise. The appeal that he has aroused among the younger public, where new and numerous consumers arrive attests to this.
Along with the creation and strengthening of the brand, with regard to distribution, they opted for a can size twice as large and at half the price, they were not in both cases the pioneers in doing so, but they were the most consistent in their app.
Likewise, they innovated and were more groundbreaking than RedBull in their product packaging, with 100% personalized cans of their sponsored athletes and with a variety of flavors or presentations, much more radical than those of Red Bull.
RedBull, it must be said that they continue to be excellent and innovative in their Marketing in general and in their sponsorships in particular, but the rise of Monster is a good example of the extent to which a successful and courageous sponsorship strategy can end up threatening the territories a priori more difficult to conquer.
By the way, Coca-Cola, chastened by its initial arrogance against RedBull, had no choice but to cede its entire portfolio of energy drinks to Monster in exchange for 20% of the company it currently owns. Aware that in the mother house, in Atlanta, they were not going to be able to provide that start-up mentality that a sector as dynamic as this requires, it seems that they made good that premise of allying with the enemy by being aware of not being able to defeat him.
Some good teachings without a doubt those of Monster, for skeptics of sports sponsorship.
Reproduction of this text is possible as long as PROA is mentioned as its original source.
Pablo de Villota
Head of Sports Sponsorship Management at PROA