Case Study: Gatorade Global Marketing Strategy

Gatorade was created by an athlete by accident. He was inspired to suitable sport drinks that became highly popular with athletes. It was this invention that later evolved into what has become a part of the portfolio of the Pepsi Cola Company, a company that officially launched in the early 1900. Today, the company not only sells Gatorade, but it also markets the iconic Pepsi Cola, its main brand and the name under which the company trades. It also sells other well-known products like 7 Up, Aquafina, Tropicana, Mountain Dew among many others.

PepsiCo's Marketing and Promotional Strategy

PepsiCo current marketing strategy for Gatorade is a result of its international standing. Since Gatorade came out at a time when Powerade and other isotonic products already had a jump in the market, its market strategy and business plan began with differentiation - an attempt to establish its product as one that is unique in taste and benefits. This approach was successful to a great extend and Gatorade was able to establish itself first in the US markets. Later the plan shifted to comparative marketing and later to diversification.

Gatorade promotional campaigns had a lot to do with its success. Gatorade's market environment always presented it with a challenge as specialize sport drinks which needed to a niche for itself.

In the 1960s to niche among the African American athletes, Gatorade created a scholarship program that awarded Black American high school seniors full time scholarships. During the same time the ad campaigns of Gatorade featured famous athletes from the African American community and they called it "Leader in Sports" campaign. This campaign was quite a breakthrough and really made an impact. It opened up a whole new market segment for the company.

In the 1980s, Gatorade's campaign was aimed at teenagers and young adults in college sport- beach bursting of youngsters having fun and drinking Gatorade was quite a common theme and popular too. It showed that Gatorade was the drink for promising athletes, something the American young sport athletes could easily identify with. The "Gatorade Gamers" theme became highly popular and the drink started creating a niche for itself among the youth athletes of the country. At first it was called "Be Best" campaign. This later evolved into "Strive" in the year 1985.

This is when the term "Gatorade Gamers" was first introduced to the nation.

In the 1990s Gatorade came out something called the "Gatorade Achievers". This campaign was aimed at proving Gatorade as a better sport rehydrating drink than its rival Powerade and involved blind tasting of the two products to choose the better one. Even though this helped improve the market share of PepsiCo, Powerade still was the market leader.

Sport icons like Michael Jordon, Carli Lloyd and Yolanda Griffith became part of the Gatorade campaigns by Gatorade to beat Powerade and come out the winner. They had a huge sports fan following and when they were seen endorsing the brand, the impact was instantaneous. Gatorade also exploited its involvement in the Olympics to broaden their appeal, improve their image and create interest among a wider array of sport professional across the world. This turned out to be a wrong move and Powerade used this set back to grow its market share against Gatorade.

The Gatorade and Powerade isotonic Battle

The rehydration battle was waged between Gatorade and Powerade. The two products had been in a battleever since Pepsi Cola first introduce its isotonic drink. But the rivalry reached its zenith in the 1990s and 2000s. The main point was neither company had a cost advantage. Hence, promotion was the main way of competing. In the 90s Gatorade started coming out with campaigns that undermined Powerade. For example, a Gatorade ad came out which showed a group of soccer players drinking the product as they celebrated their team's victor. It also used celebrity advertising vigorously. This gave Gatorade a lead in the market, though short lived. In the 2000s Powerade was beating Gatorade again. The battle was fierce with Powerade doing everything possible to outrun Gatorade. This included offering more attractive arrangements to bottlers to cease manufacturing Gatorade, and launching ads that questioned Gatorade taste and quality.

In many countries where both products competed, Powerade forced supermarkets and distributors to discontinue the Gatorade brand. To counter this action, Gatorade filed several law suits in several of its more important markets. But the impact of Powerade action was to divert Gatorade's attention from the market, by tying it up in one court case after another rather than in the market place competing for customers. The only way Pepsi Co could fight back was through brands diversification.

It started spreading its wings to include more soda beverages, varied versions of its iconic Cola, plus non- cola both in the carbonated and non-carbonated beverages in its portfolio. It started considering itself as a full range beverage company. The company's diversification also included snacks and food items like oats, and everyday snacks like potato chips. Diversification really helped Gatorade to improve its falling stand in the sport market not only in its major markets of America and Europe, but also in its international markets where Powerade and its parent company was leading the roost.

Gatorade goes Global - Its International Marketing Strategy

Just after the second world war ended, PepsiCo, the parent company of Gatorade started branching out worldwide. It went into Latin America, the Middle East and Asia and enjoyed the early bird advantage. The product (Gatorade) took some time to gained popularity due to that professional sports were still in their infancy in most of these countries and with the exception of football were not popular among a large segment of the population. fact. In the 1950's Gatorade went to Europe and gained an entry into Africa, where football was very popular. This entry into Nigeria, thought initially difficult, was a major breakthrough which the company exploited to deepen its footprint throughout the continent.

In many of the countries that Gatorade went, it discovered that comparative advertising was prohibited and in many countries the notion of a rehydrating drink had not yet gained traction among the athletic population. not an accepted concept. So, the company had to overcome this barrier in its quest to gain market acceptance. In some large markets like Japan, Gatorade discovered that people were not aware of comparative advertising and as such the campaign was not successful. So, in Japan they had to break their practice of maintaining a global campaign and instead develop a customized campaign that the Japanese would identify with. The "Gatorade Champion" was a sporting athlete that was devised by a Japanese ad agency for the Japanese market. The ad was a success and helped improve Gatorade's acceptance and share in the Japanese market double digit growth.

From the Japanese experience, Gatorade learned a valuable marketing lesson - not all commercial developed for a local market will have the same effect when used internationally. When it comes to standardized advertising across national countries, there is always the risk that it may not gain acceptance in some key markets

With the Chinese market, Gatorade had the first mover advantage over Powerade. It customized a special slogan for the Chinese market that became quite popular with the Chinese population. Yet Powerade re-entry into China was a great threat to the Gatorade. Powerade signing on several young and popular sport personalities to appear in their campaign was an even bigger threat. However, Gatorade reverted to the old ploy of showing down the competition. They featured Chinese Olympic sporting heroes and this went over well with the wider sporting crowd. This ad campaign was quite effective and brought Gatorade into the spot light.

In the USA and European markets Gatorade still uses promotional campaigns that featured an array of sporting personalities from a wide cross-section of popular and non- popular sports. As such, the brand is highly favoured by fans in many of these countries. In the international arena, Gatorade has been able to niche through its vigorous sponsorship of sporting events. In- fact more than fifty percent of the total revenue of the company comes from its markets outside the USA.

However, the company has experienced a few setbacks due to blunders it has committed in its quest to grow the brand.

Marketing Setbacks

One of the major setbacks that Gatorade suffered in its marketing runs is the literal translations of some of its advertising slogans into the foreign languages of some of its international markets. For example, the goodwill of the company suffered a terrible blow when its label competition in several African countries ended in a PR nightmare for the company. This was caused by when customers experienced great difficulties in detaching the labels from the bottles that they needed to enter the competitions. Consumers cried foul and company has a rerun the competition at enormous expense and not after huge reputational damage to its image. This same error was repeated in other markets thus causing further harm to its brand image.

A more recent marketing blunder happened in the United States of America. In the 2000, Gatorade decided to opt out of sponsoring the country's Olympics Trials, an event it had repeated sponsored for many decades. Instead, it decided sponsor, the Canadian Trials instead. This caused an enormous backlash in the USA and the brand ended losing the endorsements from some of its once coveted sporting fans. But it has been working to regain this trust, even has continues to do battle with Powerade, its arch nemesis

Questions

#QuestionMarks

1Evaluate the approaches that Gatorade pursued or should have pursued in its global markets. Based on your evaluation, make recommendations to Gatorade in the context of the global marketplace.

10

2Assess Gatorade's competitive landscape and evaluate their competitive positioning (market leader; challenger; follower or nicher)

6

3Assess Gatorade's Brand Positioning strategies based on the case6

4Based on the case, conduct an analysis of Gatorade's strategic growth initiatives6

5You are the newly hired Marketing Manager for Gatorade. Evaluate Gatorade's Marketing Mix and Integrated Marketing Communications platform. Provide your recommendations along with the justification.12

Total Marks40