A Steven Novak Creation

A Complete Situation Analysis for Gatorade

Table of Contents

I

The Creation of Gatorade p. 1

Product Features p. 2

Current Branding Strategy p. 3

Demographic p. 4

Competition p. 5

SWOT Analysis p. 6

SWOT Continued p. 7

Marketing Objectives p. 8

Marketing Objectives Continued p. 9

Citations p. 10

1

Gatorade started in the summer of 1965 with the realization that the Florida Gators football players could not make it through practice without struggling. Many players reported being dehydrated and playing sluggish during team drills. So team physicians got together and determined what exactly was the problem.

The athletes suffered from a lack of electrolytes and carbohydrates, which was not being replenished with just water. The group of four physicians blended a drink that had the perfect balance of carbohydrates and electrolytes. The drink would prove to help the Gator football team perform better on the field, so naturally they called the drink “Gatorade.”

What happened next was rather remarkable because the players started performing better. They finished with a record of 7-4 that season and the next season they finished with a record of 9-2, winning the Orange Bowl for the first time in school history.

Eventually, the drink moved into the professional leagues and the first team to adopt it was the Kansas City Chiefs. The Chiefs had trouble practicing in the stifling heat of Missouri’s summer afternoons and they kept it on the sidelines the whole year. It resulted in the Chiefs beating the heavily favored Minnesota Vikings in Super Bowl VI.

Soon it became popular to have Gatorade on the sidelines and it started the sports drink category. By 1985, Gatorade had expanded its research in sports science by building the Gatorade Sports Science Institute. The Institute allows them to better understand the human body, its needs during the stress of competition and how to improve their products.

Creation of Gatorade

Product Features

2

Gatorade has greatly expanded the sports drink category since its conception in 1965 with drinks such as “Gatorade Rain”, “Gatorade Fierce” and as seen on the left “Gatorade G2.”

Gatorade helps performance in organs such as the kidneys, stomach, lungs, muscles and most

importantly the brain.

By battling dehydration, Gatorade fights off noticeable thirst, muscle cramps, weakness,

decreased performance, nausea, fatigue, headaches and loss of focus.

Gatorade’s all-important aspect of hydrating people,

has carbohydrates to maintain energy levels

during exercise, which water does not.

Current Branding Strategy

3

Sports being Gatorade’s biggest focus, they brand themselves as the • best sports drink for an athlete trying to reach their peak performance.

They have done this through source credibility, by • gathering a group of athletes like Peyton Manning, Dwyane Wade, Derek Jeter, Kevin Garnett and Michael Jordan.

All of these athletes are memorable and influential • to kids and adults, but Jordan has the most impact.

Jordan probably • has the most source credibility of anyone in sports, having him on their side has certainly helped.

Michael Jordan, one of the greatest

basketball players ever, certainly

helped Gatorade sales with

campaigns like “Be Like, Mike.”

Dewyane Wade, a Marquette University alumni, has been with Gatorade since 2005

4

DemographicThe demographics of the Gatorade target market are active males, aged 18 to 25. They can be students, just starting their career, or well-established, regardless of status the majority of them believe they are athletic.

Education could vary also, most have at least high school level education and some have college experience.

Their attitudes can vary a little, but most of them are competitive, care about sports and enjoy their perspective athletic endeavors.

These types of consumers may also be interested in other sport-related clothing and accessories. They maybe interested in items such as jerseys, hats, shoes or anything that will show off their allegiance to a team, sport or player.

They grew up idolizing many different sports athletes and teams, which still have an influence.

They make a very wide variety of incomes because Gatorade is inexpensive. It could be anywhere from $10,000 to $60,000.

The average customer for Gatorade is about 18-25

5

Competition PowerAde is the main competition for Gatorade, others like All Sport exist, but they do not present a challenge to Gatorade. The brand of PowerAde has essentially the same target market as Gatorade; 18 to 24 year old males who are engaged in athletics.

However, PowerAde appears to be looking for the trendier types of consumers. Based upon their company website design, it seems as though PowerAde is trying to offer the attributes of having the “cooler” drink.

PowerAde has a very interactive website compared to Gatorade, one can choose from 8 different varieties of musical beats that represent each unique flavor. The website also allows individuals who are visiting the site to put up their own thoughts about PowerAde.

PowerAde does not have a good target market perception; they are considered a second place drink to Gatorade. PowerAde does not have the same quality of winning athletes that Gatorade has. They also lack scientific research behind their product without a research institute.

The future for competition against Gatorade seems bleak.Gatorade owns the sports drink category and not much can be done to stop them.

6

SWOT Analysis

WeaknessesThere maybe too many varieties and flavors of the • Gatorade product, which might ultimately might confuse and annoy customers.

Gatorade also does not have an energy drink • and do not have a lot of potential to make one because it could lead to dehydration.

Work needs to be done in these two areas and they • can heal the few weaknesses they have.

Gatorade is the market leader in • the sports drink category, dominating

the main competition of PowerAde.

Gatorade has science to back up their product • and it is proven to excel and maintain physical

performance during competition.

It is on the field of play in many professional sports, which • means not only is it on television, but it is also proven to work at the highest level.

A wide array of athletes endorse the • Gatorade message from virtually every type of sport. Not only that, but nearly everyone of their athletes are proven winners which instills additional credibility in the brand.

Gatorade has a loyal consumer base and their • brand is held in high regard. This gives them flexibility to expand into other products meant to help athletes.

Strengths

7

SWOT Continued

Threats

New energy drink flavors present a threat to • Gatorade because it is also appealing to the target market of 18-24 year old males.

The current economy also has an effect on what • people will consider to buy in the grocery store.

Finally, Gatorade has to worry about their brand • plateauing and losing interest in their target market.

If Gatorade can develop a unique • blend that would provide additional

energy and keep athletes hydrated it would certainly give them an edge.

Adding one athlete from the Mixed Martial • Arts (MMA) could help them expand quite a bit.

Since MMA has recently boomed in the sports world as the new, exciting form of entertainment

They could also add a vitamin-enhanced hydrator • to compete with brands like Vitamin Water that take some of their target market.

Gatorade also has some products listed on their • website that have some potential like protein shakes, but they are not promoted as much.

Opportunities

8

Marketing Objectives

Objective #1 : Focus promotions towards coaches from every type of sport to improve the performance of their team with Gatorade. Give certain coaches, like those without major funding a 25% discount on their bulk purchases. It would be good public relations and act as sideline advertisement.

To go along with that discount, start a contest for the best video or picture of a coach getting Gatorade dumped on them. Then the coaches could win a 2-year supply of Gatorade or sponsorship for better athletic gear. The goal of all of this would be to raise sales of large Gatorade coolers by 30%, increase sales from organized sports by 25% and overall company sales by 3%.

Objective #2 : The MMA sport is considered to be one of the most exciting upcoming sports for marketers. The audience of this market is very similar to the boxing, football or hockey audience; people who are entertained by violence. If Gatorade could sign one of their best fighters it would certainly help them a lot.

Gatorade could make a drink to go along with it. It would have added protein, an energy formula, and extra electrolytes for conditioning called “Gatorade K.O.” A drink that would provide an added boost for athletes conditioning for boxing, MMA, karate, or any other fight-related activities. Expected results would be to raise awareness by 60% for this new drink, boost sales by 20% in this market and 3% in the overall company.

9

Marketing Objectives Continued

Objective #3 : Gatorade needs to launch its own energy drink to regain those lost sales, however caffeine causes dehydration. Gatorade would need to research a formula that would increase hydration. Gatorade could call the new drink “Gatorade BG,” or “Gatorade Big Game.” Researching a new drink would penetrate into different markets and could become the pre-game drink to raise energy levels. New markets could exist for Gatorade like gamers, college students, and loyal PowerAde customers. Gatorade could make a benchmark of a 60% increase in awareness of the new drink and a 3.5% increase in overall sales for the company.

Objective #4 : Gatorade could increase efficiency by looking at all the flavors they have and determine which flavors do well. Cutting some flavors off production would certainly reduce the amount of clutter on the market and raise efficiency. By dropping at least one flavor the goal would be to raise efficiency by about 4%.

By improving efficiency, maintaining the loyal customers and marketing to new customers in different sports, Gatorade has a lot of potential to improve itself during tough economic times.

Energy drinks threaten Gatorade a lot indirectly. Gatorade needs to find a way to meet it with something like “Gatorade Big Game.”

10

Works Citied

Aaker, David A. Brand Portfolio Strategy : Creating Relevance, Differentiation, Energy, Leverage, and Clarity. New York: Free P, 2004. 299-302.

“Athletes.” Gatorade. Pepsi. 11 Oct. 2008 <http://www.gatorade.com/>.

“Gatorade History.” Gatorade. Pepsi. 11 Oct. 2008 <http://www.gatorade.com/>.

“Meet Team POWERade.” PowerAde. Coca-Cola. 15 Oct. 2008 <http://us.powerade.com/#/team>.

“Strawberry Lemonade.” PowerAde. Coca-Cola. 15 Oct. 2008 <http://us.powerade.com/#/drink/powerade/strawberrylemonade/view>.