"Marketing is the science of knowing what economists are wrong about." -- Rory Sutherland
As a means to beat Coca-Cola, no economist would approve of an expensive beverage, served in a small can, and tastes awful.
An economist using logic, facts, and numbers would never greenlight Red Bull.
But Red Bull has changed the global beverage market forever and altered the way Coca-Cola operates permanently.
Austria beating Atlanta is the playbook of how products and ideas will win going forward.
Energy drinks have transitioned from being a niche product to one of the fastest growing segments in the global drinks market. The global energy drinks market now stands at $55 billion and is projected to grow at a compound annual growth rate of 3.7% from 2018 through 2023.
How troubling is this for Coke?
Consider the first energy drink under the Coca-Cola brand will launch in Europe this month.
Coca-Cola Energy, which will debut in Spain and Hungary, features caffeine from naturally-derived sources, guarana extracts, B vitamins, and no taurine – sounds like Red Bull but with a Coca-Cola taste.
And not surprisingly, Coca-Cola Energy will be offered in 250-ml cans, just like Red Bull.
The economists of Atlanta are following the entrepreneurship of Austria.
Economists assume most decision making is driven by logic.
This is flawed.
Using logic to make a decision is called System 2 thinking.
But most decision making is driven by emotion.
This is called System 1 thinking.
Facts and numbers don’t drive our decision making.
Facts take a back seat to emotional responses.
Numbers with no context and color are no match for actual experiences.
Great marketers understand the power of ubiquitous and unconscious System 1 decision making to sell products or shape ideas.
Sutherland believes, "Once you reach a basic level of wealth in society, most problems are actually problems of perception.”
The role of a business is to create value by solving problems for customers.
As I move through life, it is clear you don’t always need to solve difficult technical challenges with massive and costly technical solutions.
You need to communicate with a customer to see things from a different, more indirect point of view.
Acknowledging the importance of perception well better position your brand and improve communications.
When it comes to entrepreneurship and thought leadership, one is bigger than two.
-Marc
Marc A. Ross specializes in thought leader strategy for executives and entrepreneurs working at the intersection of globalization, disruption, and politics.
Ross Rant: Red Bull wasn't created by economists
