Case A: Gatorade: Thirsting for Competitive Positioning

According to Larry Dykstra, manager of marketing research for Quaker Oats, the development of a focused positioning for Gatorade has allowed the company to target core users and identify secondary markets. Before Quaker acquired the beverage in 1983, Gatorade's previous owner had promoted it by portraying users as competitive athletes, adult men, teens, and caricatures of athletes.

"When we acquired Gatorade," recalls Dykstra, "it was a poorly positioned brand, with a lack of consistent focus." This position stood in contrast with the way current users were defined.

"There was no message on the uses of this product or under which circumstances and occasions it was supposed to be used.

" When Quaker looked at marketing research, Dykstra says the company found that Gatorade's main users were men aged 19 - 44, that they understood the product, had a good perception of what it did, and knew when to drink it and how to use it. Since Gatorade had been developed and marketed primarily in the South, Quaker wanted to find out if there was an opportunity to market the drink in other areas. A study of attitudes determined that the target could be expanded geographically. "We felt, based on research, that we could take a narrow, solid positioning of the product that is consistent with southem users and market the product in the North," Dykstra says.

Gatorade was positioned for physical activity enthusiasts as a drink to quench their thirst and replenish many minerals lost during exercise much better than other beverages did. Subsequent advertising in 1984 centered on these attributes.

In 1985, the company moved away from this core positioning to focus on larger publics by trying to make joke about the product's competitive heritage - a strategy that failed. [TV ads showed people in different activity situations trying to make sports jokes] A decision was made to go back to narrow positioning in 1986.

"In 1987, we focused on our primary target, but there have been refinements," Dykstra explains. "We've tried to portray users as accomplished work out group, but not professional athletes." Although the drink is perceived as a "serious beverage, the ads have added a fun

component by showing people enjoying it together. We tried to show people who didn't alienate customers, but also people they could aspire to be like." An effort also was made to portray people's motivations for using the product. A computer graphic that portrays thirst quenching was introduced-one which, according to Dykstra, came "across so strong we've started to change the language.

" But being well-focused and consistent in developing the product over time can create other problems. "Because Gatorade is narrowly positioned in terms of users and user occasions," explains Dykstra, growth opportunities are probably limited. So how can we go about identifying new opportunities?

" The answer was to look for opportunities consistent with the product's imagery: "About two years ago," says Dykstra, "we conducted a large study that included a sample of current users and other possible targets, such as older men and mothers with young children." Quaker also looked in terms of vertical target: Should it target Gatorade toward runners or basketball players? "We built a large enough attitudinal study so we could look at people who considered themselves basketball players separate from those who considered themselves to be aerobic athletes. In the user section, we asked people, "The next 10 times you're in this specific situation, are you going to use Gatorade?

" Dykstra also felt Quaker could target mothers with active children and found this group a large market that could be targeted separately. Additionally, the company is attempting to market the product year-round. We found we were promoting our own seasonality, so we wanted to develop some continuity," says Dykstra.

Quaker has most recently started marketing the product to Hispanics. "We felt we could position Gatorade to them," explains Dykstra, "because they are a large growing segment, sports are important to them, and their populations are centered in areas where its presence is already well developed." An ad has been developed for this purpose and is currently being tested. "We made an effort to do it right and not offend this group," Dykstra adds. Based on qualitative findings, the TV spot in Spanish approach is conservative and narrow, focuses on sports, and includes family members. "We showed it to several focus groups and made sure the benefits translated." At the same time, efforts were made to ensure that the changes and refinements would not alienate the core users and secondary targets.

Questions (10 marks)

A1. What are the major variables that might be used to segment Gatorade's consumer market? (10 marks)

A2. Define the core and secondary targets for Gatorade from information in the case, and using your marketing judgment (10 marks)

A3. Propose a marketing strategy for penetrating the pre-teen market 2