Powerade marketing Essay

SWOT ANALYSIS Strength: Widely Distributed Loyal Customers Drink Technology Helps Distinguish Powerade Athletic Endorsements Strong Brand Name – Powerade Weaknesses: Online Marketing and Presence of Powerade. Opportunities: Product and Market Expansion. Flavor and Drink Innovation. Threats: Potential price wars could hurt the athletic drink market. Powerade is in fierce competition with Gatorade. External analysis Competition analysis The main competitor of powerade is Gatorade. The combined market share of all Gatorade products is 84.7% of the sports drink market. These Gatorade products include traditional Gatorade, Gatorade Frost, Gatorade Fierce, Gatorade X Factor Gatorade All Star, Gatorade Ice, Gatorade Extreme, and Gatorade Endurance Formula. The combined sales for these Gatorade products were $2.1 billion for the 52 weeks ending June 12, 2005. In this time period Gatorade has seen a 0.1% increase in its market share. Gatorade has sponsorship deals with the National Football League National Basketball Association, Major League Baseball, Major League Soccer. It also has a long history, being the first sports drink on the market when it was introduced in1965. More recently Gatorade has extended their product line to include Propel Fitness Water, which competes with Powerade option.  Both Gatorade and Powerade come in a wide variety of flavors and the two brand share comparable in price. Also, both are primarily sold in plastic bottles, but also offer a powder form. See Appendix A for a side-by-side comparison of the nutritional features of Powerade and Gatorade. Other competitors of powerade include all sport, Protein Ice and various other sports drinks. These products only make up 1% of the market. Various bottled water brands pose competition to powerade Option. The bottled water industry was a $9.1 billion dollar industry (domestic) in 2004 – a substantially larger market than sports drinks. Client Analysis The sports drinks market has been expanding in recent years. Ten years ago, sports drinks were typically consumed by serious athletes and body builders. The target market now includes people ranging in age from their teenage years to the 40s who have an interest in sports. Note that these people do not necessarily play sports regularly. There are three common occasions for consumption of sports drinks: after sports activity, for breakfast, and â€Å"on-the-go.† As a result, companies are reducing their focus on sports in order to accommodate these consumption patterns Sports drinks are generally viewed as a masculine product. The male to female ratio of the market is 4 to 1. Clearly males are targeted over females in this market, but data show that females also purchase the product regularly. Objectives: In recent years, powerade has lost revenue. Not because of fierce competition against Gatorade in the sports drink industry, but against enhanced water products like Vitamin Water, Smartwater. So powerade would like to gain consumers focus by reinvigorating the brand and generating buzz. Strategy: Reach more customers by broadening its demographics from athletes to any active consumer. Tactic: Refreshing and contemporizing the brand by renaming and repackaging its drinks. So bottles are now featuring a bigger size with the name powerade appearing almost in fine print. And powerade is embarking the boat of enhanced beverages. Strategies and Positioning Introduction Powerade is an energetic drink made by the Coca-Cola company. Its market is focused mainly in the sport world, because of the energy and mineral salts that it gives to supply the expensed ones during the exercise. Powerade entered the market in 1992. A market dominated mainly by Gatorade because of the lack of competitors in the market. As it is well known Coca-cola and Pepsi are main competitors in their market; well Powerade anda Gatorade are their sport products respectively. Because of the lack of competitors in this market, and the total dominance of Gatorade, Coca-cola Co. Decided to enter de market although they were in clear disadvantage. The first year that Powerade was in the market, it made a good hit to Gatorade, at least 10% of the sales, and this was because Pepsi Co was seeing Gatorade as a drink to have at home, just a beberage. Powerade entered as a sports man drink, that’s why it commenced to fight in this market. With a new competitor in the market, well, the only competitor in the market at the moment, and it wasn ´t no other that the worst enemy o Pepsi Co. , Coca-cola, the companay decided to commence a battle in marketing that still today is having place in our markets. Innovations and New Products The Gatorade commenced its battle by projecting its product in every place relationed with the product, as gyms, football fields, etc. But it was Coke Co. The one who took the initiative in this place, by entering the market after convincing various figures of sport to promote Powerade. Pepsi got new ideas! It had to get to a wider market an no only as a healthy drink that moms could give to their children. It decided to enter more strongly in the sport market, then it launched a series of products to improve in the sport, like energy bars, more energetic drink, even a gel, that Olympic sportsmen use. Anyway it wasn’t new to Coke Co these strategies and they had new ways of enter this market and fight for the triumph too. Powerade also got energy bars, or drinks, and even gels, like Gatorade did, but Coke Co had a new product to fight the competence; Powerade zero, a drink with zero calories and zero sugars, made as a diet drink, so it entered no only the market of sport more deeply with this product; it also opened a great market to whit no fat drinks! And there are a lot of people that want to lose weight with few or no sport; this drink definitively would be perfect for those users. Gatorade counter attacked making publicity and saying that an energy drinks, needs calories to supply the ones that you burn during exercise. Coke co was ready for that, and they argued that what you really needed during sport was just a drink to supply the mineral salts that you need, and with a good flavors; they got the help of some science studies to support their argument, and it just made Powerade to gain more sales, and then steel them from Gatorade. But battle wasn’t won yet, and Powerade knows that. So they commenced a marketing campaign with famous basket and football stars to publicities its product, also they launched new flavors. And in a battle that it seems that everything its worthy, Coca Cola Co had just hired the ex-executive manager of science and sports of Gatorade. Obviously a great heat to Pepsi Co and even more if Coke co hired him in the R+D department, what would make a great amount of sales for Powerade and lot less for Gatorade. And the impact was visible early. In 2010 Powerade’s sales raised to a 32% of the market in the third trimester, having in account that in 1990 the drink was launched at it got less than a 10%. Great hit to Gatorade, but it was owning the market yet. With more than 60% of the sales Gatorade is clearly the leader, but more and more, year by  year, Powerade gets more buyers than Gatorade. Conclusion Coca-Cola co entered a market where it has clear disadvantage, sport world drinks, with Powerade, and they had no more than a 10% of the sales in the market that was clearly governed by Coke’s main rival; Pepsi Co and its Gatorade with at least 80% of the sales in the market of energy drinks. But Powerade had a great future and they where ready to open at. After Powerade got the dominium of some great and famous athletes both competitors began a marketing battle by promoting their products in sport places. And Gatorade seeing the danger of this new competitor soon opened more strategies like new products. But Powerade strategies weren’t over yet and they launched new products to the market and opened a making it wider like the same products of even a diet drink. It is obvious that both companies have great marketing strategies, but in my opinion Powerade has the lead in that way, because year by year they are getting more sales and users from Gatorade. Not going too far, I began consuming Gatorade, but now a days when I do some sport, I use Powerade. Its benefits feel better than Gatorade ones. Product Powerade is an isotonic beverage/sports drink manufactured by â€Å"The Coca-Cola Company†; it was first introduced to the market in the year 1988 and later released nationally on the United States on the year 1992. Powerade’s primary competitor is Gatorade, which is manufactured by PepsiCo’s (Coca-Cola’s main competitor). By June 2007, Powerade reached a 13.4% of the market in its category, Gatorade being the leader of the market with an 84.2%. Ingredients Powerade is composed by water, high fructose corn syrup, salt, potassium citrate, phenylalanine, sucralose, sodium citrate, malic acid, potassium phosphate, vitamin B6, and vitamin B2. Flavors This product stands out by the numerous types of flavors it offers; currently there are eight types of flavors: Orange, Mountain Berry Blast (originally Mountain Blast), Fruit Punch, Grape, Lemon Lime, Sour Melon (originally Green Squall), White Cherry (originally Arctic Shatter), and Strawberry Lemonade. Apart from this, there are six flavors of Powerade zero, the zero calorie version of the product, this are: Mixed Berry, Grape, Lemon Lime, Orange, Fruit Punch and Strawberry. Sponsorship Powerade is the official sports drink of teams like Wallabies, New Zealand’s All Blacks, River Plate from Argentina, the Australian Football League, O’Higgins F.C, Argentina’s national football team, Mexico’s national football team, the PGA Tour, Nascar, and the United States Olympic team. Apart from this, Rogelio Funes Mori from River Plate, Lebron James from the Miami Heat, and Wayne Rooney from Manchester United, are the three main sportsman sponsored by Powerade. Product life cycle The Product life cycle consist of four stages starting from introduction stage, growth stage, maturity stage and decline stage. At the introduction stage, the product is not popular and can’t really make a lot of profit. Its marketing cost may be high in order to test a market and set up a distribution channel. At the growth stage, the product start making a profit, the sales increase rapidly with some cost on marketing especially brand building. Competitors enter the market, often in large number depending on how attractive the market is. When a profit starts to decline, it’s the sign of ‘Maturity stage’. Powerade was originally elaborated for athletes. Originally it had to be reformulated because of its bad taste and because of ingredients problems. The new formula offered better nutritional values, and this led to Powerade being consumed as a common drink. Because of this, in its growth stage Powerade started releasing different types of drinks for athletes, with the objective of hydrating them. Powerade has tried to create more new products  than Gatorade and the other competition, but this task is not easy since Gatorade products are more demanded. As sales decline, the firm has several options like maintaining the product, possibly rejuvenating it by adding new features and finding new uses; harvest the product reduce costs and continue to offer it, possibly to a loyal niche segment, or discontinuing the product. In Powerade’s case, it will continue offering its products, with the confident of continue growing and not to decline, and also changing features, like a new bottle which projects a new and fresh image. Brand equity As a Performance Partner of the ‘All Blacks’, Powerade has recorded some exceptional scores of late, having seen volume sales of its 750ml bottles grow by 22.9% in supermarkets across New Zealand since 2009, confirming its status as the countries number one selling sports drink. Ahead of the launch of its latest campaign, the challenge therefore facing Powerade was to grow its brand further than the 80% market share that it currently already occupies. Equipped with the insight that Powerade was only being drunk on game days by consumers in New Zealand, the brand wanted to become an integral part of daily training routines, and utilized its sponsorship of the Rugby team to achieve this through the launch of a multi-touch point campaign launched in late June that aimed to heighten anticipation ahead of the Rugby World Cup in September. This was Powerade’s ‘Black’, which hit the supermarkets across New Zealand creating impact and patriotism among fans in what was a crucial year in the history of the nation from a Rugby perspective. Adding weight to the campaign was the launch of a TVC, ‘Train Like You’re In The Game’, that highlighted how the hard work on the training ground is replicated in a match situation, creating a direct link between high performance and the abilities of Powerade to facilitate this by hydrating the body. Online activation saw the launch of a Powerade New Zealand Facebook page, where training tips and behind the scenes footage of the New Zealand Rugby team could be accessed, providing an insight into the lives of elite athletes by posing the question to members of the New Zealand Rugby Team, â€Å"what makes an ‘All Black’?† The Powerade NZ website took this idea to a new level, featuring tips and advice from NZ Rugby strength and conditioning coach, Dr. Nic Gill, and provided a ‘hydration calculator’ tool that aggregated the amount of fluid lost from the body through sweat during exercise. In addition, various training drills were shared by Dr. Gill targeted at improving endurance, speed, performance and strength whilst details of the ‘Powerade Challenge’ were also provided. In order for consumers to test their fitness levels against those of the All Blacks players, Powerade also launched the ‘Powerade Challenge’ in July, creating a running course located on the Auckland waterfront integrated with RFID technology so that runners could track their times. Participants could register online to receive their free personalized Radio Frequency Identification (RFID) bracelet, which could be activated by placing it on unique Powerade vending machines located a various distances around the running route. All results were uploaded to the brand’s website. The integrated push from Powerade highlights the desire of the brand to cement its status as the number one selling sports drink in New Zealand, building equity in the process and showcasing its innovative technologies during the Rugby World Cup, a time where the sport (already massive in the country) is at the forefront of consumers minds. PRICE In order to talk about the Price, inside the Marketing Mix of POWERADE. To introduce this part of the presentation, what we can say is that ‘Price’ as one of the elements that gives a real benefit to the company, needs to be studied, in order to know why companies put a determined price to the product. And, as we are going to see now, the price will vary, depending on the country it’s sold and the GDP of the country. AMERICA In the table above what we can see are the values of the POWERADE and GATORADE (its major competitor in the whole market of the energetic beverages) North America: In Canada, price of Powerade is less than Gatorade, as it is usual due to Powerade (normally) sells its product at a lower price than its major competitor (Gatorade). In the USA, price of Powerade acts in the same way than Canada, lower price than Gatorade. In this case the GDP of Canada and USA is not a great factor, in order to evaluate the price the product. Central America: In Mexico, price of Powerade is much lower than in North America, but is a little greater in comparison with Gatorade. Here we can appreciate, that the GDP of Mexico is less, so price of both products is lower. South America: In Brazil, we can see that price of Powerade is quite bigger than in the USA, even with a lower GDP, in this case, the main reason could be that, Powerade demand is not so big, in order to decrease the price, or another reason, could be that, Gatorade has a greater Market Share. So, it could explain why the difference between both products is relatively big. In Argentina, we can see a greater difference between both products, and here, is clear that marketing strategy of Powerade, which is ‘to offer same product, but a lower price’, is done. Other thing that we can see about price, if we compare it with USA, it’s clear that Powerade is more expensive. EUROPE POWERADE (500 ML) $ POWERADE $ GATORADE $GDP EUROPE UK 1,33 1,42 35.500 FRANCE 2,08 2,51 34.569 GERMANY 1,58 1,83 37.900 ITALY 1,64 2,34 31.264 SPAIN 1,22 1,41 31.500 Studying the price of Powerade in Europe, we can say that: the variety of prices doesn’t vary between countries. The main reason could be that European countries analyzed are inside the European Union, and the difference of prices doesn’t vary between them. Only remark France, where the prices of Powerade (and Gatorade) are quite bigger than the rest, even comparing them with Germany, where the GDP is higher. ASIA POWERADE (500 ML) $ POWERADE $ GATORADE $GDP ASIA CHINA 1,26 1,6 8400 JAPAN 2,81 3,25 35280 SOUTH KOREA 1,26 1,89 33100 In the box above, we can appreciate that in Asia, the variation of GDP is very high, and wide, due to the wealth of the nations studied. The main thing remarkable is that in Japan, the price of Powerade is quite high than in China or South Korea, the main reason, it’s because the wealth of Japan is high than the rest of the Asian countries. AFRICA POWERADE (500 ML) $ POWERADE $ GATORADE $GDP AFRICA MOROCCO 0,9 1,145 5252 EGYPT 0,95 1,12 6180 SOUTH AFRICA 1,093 1,35 10890 Here in Africa, what we can appreciate is that the prices of Powerade (and Gatorade) don’t vary with other developed countries. One thing remarkable is that Powerade costs more in South Africa than Morocco or Egypt, maybe because the GDP of this country is higher than the others compared. OCEANIA POWERADE (500 ML) $ POWERADE $ GATORADE $GDP OCEANIA AUSTRALIA 2,25 2,79 40820 NEW ZEALAND 3,56 2,76 29535 Analyzing the prices in Oceania, we can appreciate that there is a big difference between the prices of this continent and the rest of the world. Bottles of 500 ml, of Powerade, are more expensive than in other countries outside Australia or New Zealand. One reason could be because of the distance between this countries and Asia,  so, the production cost could be higher. Other reason could be because of the GDP, if we see, its high comparing it with the media of GDP, and between Australia and New Zealand the difference is clearly defined. In New Zealand is much more expensive to buy a bottle of Powerade than in Australia. BUT, if you buy a bottle of Gatorade is cheaper than a bottle of Powerade, this could because the demand of Gatorade is higher than Powerade, so the company decided to reduce its price, in order to maintain the consumption. Natural disasters in Australia Natural disasters are events that occur naturally such as earthquakes, cyclones, Storms, and floods. These kinds of disasters can cause significant physical damage, interruption of business services and personal injury/loss of life. Due to the effects of global warming and consequential climate change the rate of natural disasters in Australia is increasing day by day. I myself have faced such kind of natural disaster in Pakistan in the year 2012 which was a flood. So I can relate and describe how painful and how bad economically these disasters can be; destroying each and everything coming in its way. There are two types of economic impacts due to natural disasters: 1. Direct Economic impact. This includes lifelines such as water, sanitation system, gas, electricity, telecommunication and transportation which are vulnerable to all types of natural disasters which are included in public infrastructure and community facilities. Other than this business enterprise, households & residents are also part of direct impact. 2. Indirect economic impact. Indirect economic impact includes disruption and clean up. These impacts are incurred due to consequence of the disaster. Australia has always been facing these kinds of disasters which made a huge loss for Australia and a lot of time and money was spent to bring Australia back in its kind of original form. If we go through the history of Australia  we can read that from the year 1967 till 1999 there have been 265 such disasters costing more than $10 million dollars each. The total cost of most disasters is ranging from $10 to $50 million which is a huge amount. Among the entire disasters, floods were most common and most costly. Floods have always been on number one causing destruction on a high level, contributing $10.4 billion or 29 percent to the total cost followed by Storms and Cyclones making 26 and 24 percent of the total cost. The bushfire crisis in Victoria is Australia’s worst-ever bushfire disaster. It’s also Australia’s worst natural disaster in 110 years which so far has claimed 131 lives. If we analyze the currently available data then we come up with a statement that total cost of natural disasters in Australia between the years 1967 and 1999 is approximately $36.4 billion, which is easy to say and hard to believe. If we integrate deaths and injuries into this data then the total cost increases to $37.8 billion or approximately $85 per person compared to prices in 1999. This estimation brings to an average annual total cost of natural disasters to $1.14 billion since 1967 or $1.17 since 1980 and $1.51 billion prices are subjected to year 1999. An organization called â€Å"The Natural disaster Relief and Recover Arrangements (NDRRA) is an organization that provides Commonwealth and States which share costs in rebuilding the assets of states that are damaged by the natural disaster. By which the states are able to get a little part of the total cost from the Common wealth used in reconstructing state government assets. Every state in Australia has some self-insurance or some form of managed fund which helps in insuring states assets. It is recommended by many that the formula used under â€Å"The Natural Disaster Relief and Recovery Arrangements† should be changed to expenditure method before the State or Territory gets any insurance recovery. Natural disasters cause so much heavy burden on the economy of Australia that at some stage it becomes so hard for the government to deal with the outcomes of that disaster. There are many ways which can help the government getting over these disasters and make plans or organizations which can work  on these disasters as these disasters are unavoidable part of Australia. Nothing much can be done besides what has always done on such events. Below are some ways that can help. Low interest concessional loans should be given on large scale by the government to companies. Series of loan repayment should be increased to as maximum as possible. Flood premium discount should be given for existing homes but not for new homes. Every year some part of the Gross Domestic Product should be saved a side. Emergency relief assistance and emergency re-establishment assistance should be increased. Provide a carrier that has good reputation in claiming service. 1. Neil Gentle, Sharyn Kierce, Alistair Nitz, 2001 â€Å"Economic cost of natural disaster in Australia† Retrieved from â€Å"https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDAQFjAA&url=http%3A%2F%2Fwww.em.gov.au%2FDocuments%2FEconomic_costs_of_natural_disasters_in_Australia.pdf&ei=XO17UdX2FcaiigeT1oCYCQ&usg=AFQjCNE89LiWzBdi_zr3hvixQdXzkLYLBA&sig2=bVIuhvxRuq8ZUmgV1h7sYg&bvm=bv.45645796,d.dGI† on 18th April 2013. 2. Emergency Management Australia, 2002 â€Å"Economic and Financial aspects of Disaster Recovery† Retrieved from https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CDUQFjAB&url=http%3A%2F%2Fwww.em.gov.au%2FDocuments%2FManual28-EconomicandFinancialAspectsofDisasterRecovery.pdf&ei=XO17UdX2FcaiigeT1oCYCQ&usg=AFQjCNGgKyl9WZm6lEw4LUhncbrFlzf7zA&sig2=4zfhYHeYKdlqn4qrM5cFaA&bvm=bv.45645796,d.dGI on April 19, 2013. 3. Bureau of Transport Economics Report 103, 2001 â€Å"Economic costs of natural disasters in Australia† Retrieved from http://www.bitre.gov.au/publications/2001/files/report_103.pdf on April 21, 2013. 4. John Trowbridge, Jim Minto, John Berrill, September 2001 â€Å"Natural disaster insurance review,†