H2 Campaign Plan

Georgetown School of Continuing Studies

Karalee Morgan

Executive Summary

The sports drink category is losing market share to other hydration beverages as the consumer lines have begin to blur between these markets.

The market is showing that:

• Consumers of the liquid beverage category extend beyond athletes

• There is a demand for healthier sports drink options

• Natural flavors and organic ingredients are in demand

• Consumers in the food and beverage market want cleaner labels and transparency of ingredients

Gatorade needs to launch its’ H2 offering as healthy sport drink option for the female millennial audience who desire a nutritional beverage that has more of “the good stuff” and skips the sugar and harmful ingredients.

This can be achieved by:

• Following this integrated campaign proposal based on strong consumer insight

• Providing a budget of $25 million

• Optimization of marketing based on a strong test agenda

• Targeting this millennial audience via a robust social media and digital strategy

Background and Market Dynamics

• The overall soft drink market continues to grow. There was a 5 billion dollar growth in US sales between 2015 and 2016. Sports drinks, such as Gatorade, make up approximately 7% of the soft drink market share.

• In 2015, Gatorade was the 5th leading in volume share of the whole liquid refreshment beverage market in the US. Its’ 4.8% of share was beat by Coke (16.5%), Pepsi (8.2%), Mountain Dew (5.6%), and Dr. Pepper (4.9%). Trailing Gatorade were Nestle Pure Life, Sprite, Dasani, Aquafina, and Poland Spring. (Appendix A)

• PepsiCo represents 42% of dollar sales in the sports drink market. This is driven by the Gatorade brand. In 2016, PepsiCo gained slight market share from Powerade by focusing on athletic recovery. (Appendix B)

• In 2014, Gatorade Perform sales brought in $1,608 million dollars and next closest competitor was Powerade at $327 million. The next highest dollar producers for Gatorade in 2014 were Gatorade Frost and Gatorade Fierce. (Appendix C)

• New trends from Mintel reports indicate that showcasing product benefits is on the rise instead of “less bad for you” marketing. This comes from consumers’ feedback of important influencers of what and why they buy, as well as claims of physical and dietary health that they agree with.

In order to continue to secure Gatorade’s place in the market, rising competition from other soft drinks such as water, tea, and juice, have created the need to

expand product offerings. In hopes to secure additional market share, while still maintaining its’ current market, Gatorade will need to leverage the H2 line to

appeal to this new target audience.

Background and Market Dynamics

Target Audience Profile Persona

Overview:

Jessica is somewhat of a perfectionist as she is always trying to be the best family member, employee, and version of herself which means on top of everything else, she still tries to squeeze in time for the gym. Since she realizes she doesn’t have as much time as she wishes to dedicate to the gym she is very health savvy when it comes to eating the right things to keep her going. Engaged on social media and spends her “down time” surfing the web.

Need:

Needs a healthy sports drink option which is rich in the “good stuff”. It needs to provide her with vitamins and nutrients to refuel her body without adding a bunch of the bad stuff.

Beliefs and Attitudes:

Jessica doesn’t view her workouts as strenuous enough to override tons of sugar and unhealthy ingredients so she would rather just skip a drink if it isn’t in her view of healthy.

Key Motivators:

Jessica is internally motivated. She will however grab onto a product that seems to be made just for her. She will look to purchase a sports drink that aligns with her goals.

Barriers to take action:

There is a stigma of Gatorade as an unhealthy brand. In order to appeal to Jessica she would have to be convinced that this product has really changed and understands her needs. Communication barriers may include initial skepticism so the H2 website will need to provide the details and research she is looking for.

Jessica, Age 31, Mother of 2

Full-Time Physicians Assistant

Target Demographics/Psychographics:

• Millennial women between ages 18-34

• College educated, Employed full-time

• Heavily involved with her family

• Doesn’t feel she is hitting all of her

fitness goals due to time constraints

• Views herself as unique so she is

selective when shopping, things need

to be just the right fit for her needs.

“I only have a very select time to dedicate to working out so throughout the

rest of the day I concentrate on what I’m consuming in order to make sure it

doesn’t undo the benefit of my quick 45 minute workout!”

Consumer Insights

Millennial women are not interested in a sports drink that they believe will do more harm than help. While are avid gym go-ers, they are not (and do not consider themselves) professional athletes who can burn through extra sugar and calories.

• Millennial women feel better when they consume wholesome, organics ingredients.

• Transparency about ingredients and promotion of the health benefits is alluring to millennial women.

• Millennial women need to feel as though H2 was designed for them. They know they aren’t going to burn enough sugar/calories for a Gatorade original and they want to feel as though you don’t have to be a professional athlete to have your health and fitness goals supported.

Problem to Solve

• Consumers have a negative perception of Gatorade (high sugar and calorie content)

• Consumers believe Gatorade is really only a brand for athletes

• Consumers want more healthy ingredients which they cannot currently find in Gatorade

• Gatorade only makes up 4.8% of sales in the liquid beverage market

• Competition from other soft drink brands is growing

Millennial women are looking for a nutritious drink that provides more of “the good

stuff” from a company that they trust.

Campaign Goals and Objective

Demonstrate that Gatorade H2 offerings and this target audience’s desires do intersect!

Increase sales of

Gatorade H2

which will help

increase overall

market share

Attract new

audience to

Gatorade while

maintaining old

customers

• Increase sales by 20% during the first 6 months of the campaign (including all products – old and

new).

• Increase volume of website visits by 30% during the campaign period (January 2018-June 2018).

• Sell 15,000 bottles of H2 per week in the first month, and increase by 10% each month of the year

thereafter.

• Retain 50% of new customers that buy H2 between January and June 2018 while

maintaining old customers.

• Increase frequency of website visits by 30% during the campaign (January-June 2018).

• Receive 1 million+ shares or likes via social media between January and June 2018.

• Receive 90%+ positive feedback via customer satisfaction surveys during the first 90 days.

Strategy Overview

Awareness Strategy: We will use print, TV, and our website and mobile app to generate awareness of the H2 product offering. These will be the main streams of information and grow knowledge of H2.

• Print Advertisement: Print advertisement will be an important asset for building awareness - billboards on the drive to drop the kids at school, posters in the gym she visits, coupons in the grocery store, flyers in Starbucks, perhaps a partnership with a healthy food she always grabs at the store.

• TV Commercials: TV is a great way to reach a large population. We will utilize 20 second clips communicating our main campaign messages and creating awareness of H2. These should primarily be placed during morning news and/or during evenings on channels like HBO and ABC. This will be a main media used for awareness.

• Website and App: Website should promote main campaign messages as well as having a store locator where people can search for their closest location to buy H2. Here should be a tagboard pulling in all social media messages that use #H2ForLife. There will be a coupon section as well as links to all social media platforms. App should be easily downloadable and will serve has a fitness tracker and community building tool to promote encouragement.

January March April June

Awareness – 80% reach of target

audience

Awareness – 80% reach of target

audience

Sales – frequency focus Sales – frequency focus

Our campaign will launch in January in support of new resolutions. This is the time of year where our target

audience will be thinking about their fitness goals and it’s a strategic time to launch the H2 product as a new

offering to help hit those goals. Our campaign will concentrate on reach and awareness but progress towards

frequency and conversion until the end of June. This campaign will come to life through digital interaction but

also be fostered by print advertisement and events.

Strategy Overview - Digital

Digital Strategy: Digital Strategy will be the key to driving engagement and growing the H2 brand, it will consist of social media, banner and web ads, SEM, email, and blog.

• Social media: Facebook, Twitter, and Instagram will be the main social media channels. Millennials are engaged on these platforms and during the awareness portion of our campaign, we will see a large reach via these channels. We will utilize sponsored ads aswell as look alike audiences to help expand reach. YouTube will capitalize on short ad spots before trending new fitness videos since our target audience is always looking online for a new workout suggestion.

• Digital banners/ads: Digital ads will serve as a reminder across the internet wherever our target audience travels. These ads will not only be present on our own webpage but will be served on various sites through retargeting. These ads will serve to promote H2 but also drive people back to our website to read more and find a location near them where they can purchase.

• Adwords/SEM: By using keywords like healthy sports drink, organic hydration beverages, Gatorade, workout support, etc. we will attract people who are searching on the web. This will primarily build awareness and 80% of budget should be spent in early months of campaign.

• Email Marketing: In order to expand reach, we should buy email lists and broadcast a 4 series email campaign between January-March. These campaigns will build awareness, increase reach, and direct people to our website where H2 offerings will be displayed as well as the upcoming events, contest, workout videos, and ways to be involved.

• Blogs/Influencers: We will use key influencers to build community and encourage story sharing. These women should be recognizable to the public but also have similar goals and lives as our millennial women target audience.

January March April June

Awareness – 80% reach of target

audience

Awareness – 80% reach of target

audience

Sales – frequency focus Sales – frequency focus

Promotional Strategy – We will use PR to generate momentum as we move throughout the campaign which will include events, coupons, and a contest.

• Events: Just as we sponsor athletic teams, we should look to sponsor 2 events during the campaign, perhaps a tough-mudder or color run. These events should be Gatorade H2 branded, provide the beverage to participants as well as other promotional items and coupons.

• Coupons: Coupons should be present on our website, available through social media engagement, and via print distribution in stores. This is a good way for consumers to feel as if they are getting a “good deal” while also encouraging them to try this product for the first time.

• Contest: To promote engagement and community building again, during the month of May we will encourage consumers to take a photo of themselves doing their favorite activity with H2 and post on social media incorperatingthe #H2ForLife hashtag. 5 winners will be randomly selected for home gym equipment.

Strategy Overview - PR

January March April June

Awareness – 80% reach of target

audience

Awareness – 80% reach of target

audience

Sales – frequency focus Sales – frequency focus

Strategy Overview

Most of the marketing done in the early months of the campaign will continue throughout the full campaign but our focus will shift from reach to frequency in the latter months.

• For example:

• After we digitally reach the majority of our audience in the first two months, we will adjust spend to focus on serving those people multiple ads throughout the week instead of expanding beyond that population.

• Our contest will kick off in May to encourage people to keep purchasing H2. They can be entered in the contest for as many different occasions that they post. This is our opportunity to get them to incorporate H2 in their daily lives without them even realizing.

• Story sharing and social media community building will become to focus as our growing community will foster and uplift consumers to keep working towards their goals and allowing H2 to support them.

January March April June

Awareness – 80% reach of target

audience

Awareness – 80% reach of target

audience

Sales – frequency focus Sales – frequency focus

Value Proposition

• To: The busy but health conscious millennial women who are trying to reach their personal fitness goals

• Gatorade H2 is the: healthy and wholesome sports drink

• That: provides the right balance of nutritional needs without the added “bad stuff”

• Because:• We have listened to you and created a drink to help you accomplish your fitness goals • We know that you value organic ingredients and view nutrition as extremely important so we

have removed the “bad for you” ingredients like sugar and added more “good for you” ingredients so that you can get a jumpstart on your days’ nutrition

• We support all athletes and your goals are just as important to us as any other

• So that: You have a sports drink that is aligned with your fitness goals, promotes well-being, and makes you feel good about yourself and your accomplishments.

Key MessagesUnlike Gatorade ever before.

We agree that adding the

healthy stuff doesn’t

outweigh bad ingredients.

“More of the good

stuff” – organic,

wholesome

ingredients

One size doesn’t fit all so

why should a sports

drink. H2 provides

nutrition aligned with

your needs.

Solution for women who don’t

burn enough in the gym to

compensate for the high sugar

content needed for athletes in

Gatorade original.

What you do is enough

and now you have a

sports drink to support

your fitness goals

New year, new you, new

goals, new Gatorade H2.

Creative Ads

Creative – TV Commercial or YouTube Ad

Jessica gets home from a long day at work, picks up the kids, quickly makes dinner and checks her watch. It’s already 7pm! Hoping to find encouragement to hit the gym she jumps on her facebook…

Unfortunately, the first video that she sees is of a fitness model in the latest gym fashion. She peaks in the mirror and feels totally unmotivated, knowing that just isn’t a reality for her. She puts away the gym clothes that she had pulled out of her closet and turns on the TV instead.

There pops up a commercial with a women whose day looked just like Jessicas but on Facebook she visits her favorite H2ForLife page and see’s other women just like her kicking butt at the gym so she grabs her H2 and heads out.

The woman on the couch thinks for a minute, smiles, and decides she will go to the gym after all!

Campaign Calendar

The overall H2 line will launch on January 1, 2018. We will capitalize on the increased attention to physical health as New Year resolutions. “New you and we’re new too”, striving towards better health together. In order to make this launch date possible, please see the campaign calendar

outline below.

Test Agenda

Creative Test: Creative version A will build better awareness than creative version B.• Same creative display ad with only change to health feature. Version A highlighting organic and version B highlighting 100% all natural ingredients. • 50/50 split of the retargeted audience: half of those served display ads after visiting a Gatorade page will receive the organic ad and half will receive

the 100% natural ad.• Run for 3 weeks until statistically significant• Measure by amount of impressions and clicks• Determine the winner and optimize using that language moving forward

A/B Email Subject Lines: Version A will receive better open rates than subject B.

• In 4 part email series split the population in half changing only the subject line.

• Send 50% of population subject line A and 50% subject line B.

• After determining winner, consider resending with winning subject line to those who did not open the losing subject line.

Promotional Testing: 50% off will lead to more purchases than BOGO.

• Distribute 50% of coupons displaying BOGO and 50% using 50% off language.

• Create unique tracking codes for each. Test for one month.

• Whichever was used more often Is the winner.

TV Advertising Message: Adding “wellness and naturalness” to messaging will increase visits to website and Google searches.

• Create a focus group comprised of our H2 target audience to see if adding words such as “wellness” and “naturalness” in intriguing to this audience.

• Show sample TV commercials approximately 20 seconds in length each – only varying by adding or removing words of wellness/naturalness.

• Ask focus group to rate the two commercials and describe how each made them feel.

• Determine a “winner” and put that commercial into production.

Budget

Success Measurement and EvaluationTactic Measurement

Social Media (FB, YouTube,

Instagram, Twitter)

Impressions and video views. New followers, likes, shares, retweets, and use of the hashtag. 25%

increase in social media followers by 3rd month in campaign.

Website and App Number of visitors, time on page, click-thrus, conversions. 35% increase in site traffic during January

(first month of campaign). 500,000 App downloads.

TV Commercials Reach. 33% of website users should be new users within from the launch of the campaign through

completion.

Contest 50,000 contest participants during the month of May.

Digital Ads/Remarketing Average click thru rate of 1% with ability to optimize to best performing ads.

Blogs Promotion of social engagement through blogging. Directly sharing, commenting, and engagement will

be a measure as well as overall website traffic.

Events 30,000 event attendees. With 60% participation in post event surveys and 40% utilization of post

event coupons.

SEM Directs to website to be accountable for 6% of site traffic. Adjusting keywords via performance.

Email Marketing Subject line testing. Tracking open, click thru and conversion rates.

Coupons Increase sales by 20% during couponing months. Track individual coupon codes to test which is driving

the most sales.

Sales Dominance in the sports drink market will drive share from 69.5% to 70.2%. To achieve this overall

annual growth in year one, the H2 line will need to hit $30 million in sales by completion of quarter

one.

Appendix

Appendix

Appendix

SWOT Analysis

Strengths

• Brand recognition

• Trusted among athletes

• Replenishment of electrolytes

• Sponsorships

• Steady hold of market share

Threats

• Competetive pressure

• Beverages outside the sports

drink category are stealing

market share

• Perception that Gatorade

has never been a healthy

option

Weaknesses

• High sugar and calorie content

• Not considered largely outside

of professional athletes

Opportunities

• Healthier ingredients

• More balanced nutritional

offerings

• Different look for H2 line

can differeniate it from

Gatorade original

References

• (2015). Sports Drink Wars In The U.S. To Get Exciting? Forbes. Retrieved March 25, 2017, from https://www.forbes.com/sites/greats peculations/2015/08/18/sports-drink-wars-in-the-u-s-to-get-exciting/#791e1ec81769.

• An Insight into Sport Drink’s Positioning in the US Beverage Market Mar 29, 2016 – Sharon Bailey. http://marketrealist.com/2016/03/insight-sport-drinks-positioning-us-beverage-market/.

• Bachman, R. (2015). The sports-drink upstarts. The Wall Street Journal . Retrieved April 1, 2017, from https://www.wsj.com/articles/the-sports-drink-upstarts-1448907023.

• Beverage Digest. (n.d.). Leading liquid refreshment beverage (LRB) brands in the United States in 2015, based on volume share. In Statista -The Statistics Portal. Retrieved March 19, 2017, from https://www-statista-com.proxy.library.georgetown.edu/statistics/225519/leading-liquid-refreshment-beverage-brands-in-the-us/.

• Euromonitor. (n.d.). Market value of soft drinks in the United States from 2011 to 2016 (in billion U.S. dollars)*. In Statista - The Statistics Portal. Retrieved March 19, 2017, from https://www-statista-com.proxy.library.georgetown.edu/statistics/491700/soft-drinks-united-states-market-value/.

• Global sports drink market trends and forecast. (2017, March). Retrieved April, 2017, from https://www.mordorintelligence.com/industry-reports/sports-drink-market.

• In Statista - The Statistics Portal. Retrieved March 19, 2017, from https://www-statista-com.proxy.library.georgetown.edu/statistics/422 484/us-market-share-of-soft-drinks-by-category/.

• In Statista - The Statistics Portal. Retrieved April 1, 2017, from https://www.statista.com/topics/3051/sports-drinks/.

• Nutritional and performance drinks.(2016). Mintel, Executive Summary.

• Roberts Jr., W. (2016). Organic option from Gatorade. Mintel

• Suntory. (n.d.). Market share of soft drinks in the United States as of 2016, by category.

• Consumer Reports pulled from Simmons