Gatorade †Marketing Project Essay

The Gatorade Company makes the worlds leading turns pledge. In part, this is due to its ubiquitous marketing strategies that stand be seen al well-nigh everywhere. Gatorade is the official sports suck up of the NBA, WNBA, MLB, NHL and MLS. It is besides the official sports drink of the NFL and has become part of a famous tradition, the Gatorade Dunk where the bring forwardning athletes of the Super drum roll empty the Gatorade cooler over the coach.Gatorade has as well as been advertised by some of the gr run downest athletes in history from Serena Williams, to Peyton Manning, to Olympic gold medalist Usain Bolt, to probably the most famous endorser in NBA great Michael Jordan. Gatorade makes several point of intersections including the G series which consists of pre-game, thirst quencher and post-game beverages. There is also the G serial Pro which consists chief(prenominal)ly of sports regimen products. Then there is G Natural which contains much than natural ingredi ents. The Gatorade Company also makes Propel Fitness Water.The Gatorade Company was not always such a large company nor was it created by an existing beverage corporation. It was created as a necessity by the group in which its named aft(prenominal) The University of Florida Gators. Gatorade was created in 1965 by a team of five scientists led by Dr. Robert Cade. The beverage was created to improve the athletic performance of the universitys football team. When more(prenominal) than a dozen of the players had move sick due to dehydration from the intense heat and training, the scientists researched dehydration and what the body loses during immense activity.They found out that sugars, salts and minerals were required to hydrate the human body after immense physical activity water alone was not enough. They created an electrolyte-carbohydrate drink and supplied it to the athletes. The results were phenomenal. The Gators were able to outperform their rivals, especially in the latt er half of the game where enervation seemed to cripple their opponents. The Gators went on to win their first Champion ship and soon after Gatorade was adopted by other sports teams.Supplying the beverage became more and more difficult for the scientists as demand increased, and after failed attempts to commercialize it, Stokely-Van Camp acquired U. S. properlys to the drink and Gatorade Inc. was incorporated in Florida in 1967. After much success, the coach of the Florida Gators suggested the winning saying to the coach of the Kansas City Chiefs. The Chiefs were impressed and used throughout the entire season culminating with a Super Bowl victory. Much of the growth of the Gatorade Company occurred when it was acquired by supporter Oats, which bought Stokely-Van Camp for $220 million in 1983.It was under Quaker Oats that Michael Jordan, who was arguably the most famous and fast rising athlete at the time, became the celebrity spokesperson for the company. gross gross sales sky rocketed and Gatorade was once again the leader as the sports drink market grew to $1 one million million by 1994. Also during its have gotership by Quaker Oats, the product went global. It was and continues to be sold in numerous countries and several continents successfully. It also expanded its product line to include more flavor varieties. Towards the end of the 1990s the sports drink market grew to $2 billion.With its consistent success, Gatorade continued to launch new products including Propel Fitness Water. In 2000, PepsiCo, a multinational corporation commission on beverages and snacks, acquired Quaker Oats for $13 billion. It bought over Quaker Oats primarily for the Gatorade imperfection, which is still one of the corporations largest and most successful divisions. Gatorade continued to grow because it renewed its contract with Michael Jordan, campaigned its Is it n you? ad, and also signed a host of new celebrity athletes.Today, Gatorade has over a dozen plants wher e it manufactures the products it sells and is still the leader in todays $3 billion dollar sports drink market. Target Market Description The original chump market for Gatorade was sports teams. In fact, it was originally only sold to sports teams. It spread from the Gators football team to other Gators teams such as basketball. It then spread to other college sports teams until finally it reached professional teams in the NFL. It spread team to team until it became the official sports drink of the NFL in 1983 and was used by over 70 divisions and college teams.Sales trends increased with the same rapid pace. In the early 1980s Gatorade led the $200 million sports drink market. Net sales were recorded at $90 million in 1982 and grew exponentially in the following years. By the mid 1980s net sales were recorded at $170 million. During the latter half of the 1980s Gatorade marketed its famous Gatorade is Thirst Aid for that deep win body thirst, this along with televised adds, stra tegic placing of the product on sidelines during big games and a growing sports drink market raised net sales to nearly $900 million by the end of the decade.The demographics of the Gatorade G Series target market * Traditionally active males, aged 18 to 25. They can be students, just starting their careers, or well established. * They grew up idolizing many contrasting 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. * Education could vary also, most have at least(prenominal) high school level education and some have college or above experiences. * These types of consumers may also be interested in other sport-related enclothe and accessories.They may be interested in terms such as jerseys, hats, shoes or anything that will show off their allegiance to a team, sport or player. * The G Series core target is the 13- to 17-year-old high-school athlete, while G Series Pros target is the 16- to 24-year-old who is in the business of being athletic, whether as an elite athlete or personal trainer. A more detailed look at the MRI report gives a great glimpse into the target market for the sports drink exertion. As highlighted in the index, 18-24 year olds are the core target market.With an index of 174, that means 74% of that age range are more worryly to drink sports drinks. Moving further up the age range, 18-49 year adults provide a tremendous opportunity for this market. As highlighted by their percent down (which indicates the percent of those persons out of everyone that consumes a variable), 78. 2% of the total population that drank sports drinks were of that age group. Capturing the teen consumer has been identified as a priority for the brand, with the CMO of Gatorade, Ms. Robb-OHagan, conceding that teens thought the brand was dated.Last years shift to G was meant to grab their attention. With that accomplished, she said, t he brand has been geting with teens to test and promote the new products. Through May, a mobile locker room is making its way to high schools, showcasing the G Series products. What were focusing on this year, from a marketing standpoint, is making sure that the high-school athlete understands the G Series, understands the three-part series, Mrs. Robb-OHagan said. If we land that strongly with the teen consumers, we have a lot of opportunity.A Reporter Report is complete with explanations of key numbers. Please note that all the numbers are based on the 2009 Fall MRI study, and that the projected numbers (000) are expressed in thousands. (Appendix A). Market Trends and Macro Forces According to the Beverage merchandising Corporation, the sports drink attention has actually shrunk in sales by 12. 3% from 2009. Considering that Gatorade holds over a 70% market share of the entire sports drink market, they sawing machine losses in gallons produced by 15. 5% in that same year.In a more local look at the market, from 1986 to 2009, the geometric growth of the perseverance in America has been 11. 62%. However, considering the great growth for the first 19 years of its existence from 1986 to 2005 of 14. 3%, this number might be misleading. A more accurate picture can be painted by using the last 5 years, letting the state of the economy be fully reflected in growth. In this new scenario, the growth is at -. 27%. Gatorade markets not only to the athlete, but to the casual drinker as well construction workers, restaurants, and families for dinnertime.Sales records for the sports drink brands for the year 2009 and 2010 are available in the Appendix B. Market Trends Changing Needs Gatorade being a sports drink primarily focuses on the needs of the athletes. The researchers take that the athletes are looking for pre and post workout drinks. The average consumer is already consuming during the before-and-after occasion, said Sarah Robb-OHagan, chief marketing officer at Gatorade. Different consumers have contrasting alimental needs on game day vs. training days.What weve seen as weve developed these products is different consumers mixing and matching their own regime to meet their needs. In addition, in order to build long term brand loyalty Gatorade is focusing on target high school students between the ages of 13-17 years. What were focusing on this year, from a marketing standpoint, is making sure that the high-school athlete understands the G Series, understands the three-part series, she said. If we land that strongly with the teen consumers, we have a lot of opportunity.What are also sparking the changing needs in this market trend are consumers increasingly focusing on their health. They are conscious about the effects of beverages on their own bodies. According to Mintel, a consumer packaged goods monitoring service, some of the product areas with the highest growth were in the sports and meal replacement categories, which place a gr eater emphasis on nutrition. More beverage companies are focusing their attention on adding new nutritional benefits to their new products, promoting a products ability to enhance sports performance.As the consumers are growing increasingly conscious about the contents of the sports drinks and the needs of the athletes are changing, so is the change in formulations of sports drinks. It is getting even more complicated. Sports nutrition companies are looking at low glycemic sugars as functional sugar systems to enhance endurance in certain products. These include newer functional sweeteners, such as isomaltulose and trehalose. Gatorade has risen to this challenge of balancing innovation with market needs.Beverage World selected Gatorade as the Winner for Brand Reinvention when it released the G-Series which includes the three products Prime, Perform and Recover for before, during and after work out respectively. Macro Forces There are many macro forces that affect the sports drink in dustry. Among the most toxic is the current state of the economy. As we have discussed earlier, the unworthy spending power of consumers has shifted demand to less expensive alternatives, such as water or vitamin infused drinks. As the recession begins to lag into the next year, the sports drink industry can expect sales volume to remain at current levels.Given that the U6 rate (the most comprehensive form of unemployment that combines both unemployed and underemployed) is at 17%, discretionary income will continue to be a hindrance on this industry. While our competitor analysis is fully developed in the approach shot sections, it should be pointed out now that competition plays a significant role in this industrys macro forces. Currently, there are two main competitors, Gatorade and Powerade, or Pepsi and Coke, respectively. Unfortunately there is no room for consolidation in this domestic saturated market, so the competitive battles that spur between the two eat away at costs a nd sales.A recent example comes from a lawsuit between these two companies. An article in the Beverage Industry relating to the industry issues reported a clash between Coca-Colas Powerade and Pepsi-Colas Gatorade on a lawsuit over brand advertising. At issue was a Powerade natural selection ad that featured a drag race between horse-drawn carts, one of which was carrying 10 bales of hay and the other 50. The message was that 10-calorie Option allowed the 10-bale horse to win the race over the 50-calorie competitor.The lawsuit argued the ad sent the message that Powerade was more effective as a sports drink, as well as containing fewer calories. The depend was resolved in a matter of days, with Coca-Cola agreeing to modify the ad. Such trivial pursuits between the two are costly to the industry and companies themselves. In addition to the strike competitors, sports drinks are facing increased competition from bottled water like Vitamin Water and coconut water and nutritional drin ks like skimmed milk and chocolate milk for hydration and nutrition.Coconut water, skimmed milk and chocolate milk are easy to produce and provide natural health benefits compared to the artificial electrolytes in popular sports drinks like Gatorade. While health concerns have had positive effects on the industry, there are also some negatives as well. A new study make by researchers at The University of Iowa suggests that the sports drink Gatorade erodes teeth faster than a carbonated soft drink. I dont think everybody realizes how erosive these things are, especially Gatorade and flushed Bull, Leslie A.Ehlen, a student at the University of Iowa School of Dentistry tells WebMD. People need to be aware that all sorts of beverages can be causing dental erosion. Of course, this leads right back to another macro force in regulator procedures. Although in know will health issues like this loom over the industrys ability to sell their products, the F. D. A (food and drug administrati on) can certainly dampen sales volumes if need be. The F. D. A has recently banned production of Four Loko as it the combination of caffeine and alcohol mix is extremely dangerous.