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Pepsi-Cola Gets a Boost from Healthier Beverages P psi was experiencing a drop in market share, declining America. The company also sent out a special sales and mar- sales, and a flat share price. It was time for PepsiCo to keting team called G-Force, which included any former college engineer a change in its corporate fortunes in the North athletes, to foster marketing relationships with local retailers. "It's American beverage market. an aggressive, grass-roots effort," says Gatorade's president. In addition to trimming costs, the firm added $500 to All these changes and improvements did have some effect $600 million to its beverage advertising and marketing budget. on the company's performance. Pepsi still trailed Coke in market It hired new Pepsi spokespeople, including actress Eva Longoria share with Coke's market share at 42 percent and Pepsi's at and rapper Nicki Minaj, and it introduced a mid-calorie Pepsi. 31 percent. On the positive side, the company's share price But for several years North American consumers have been increased by over 15 percent while Coke experienced a share turning away from carbonated soft drinks and choosing healthier price increase of just over 12 percent. beverages such as juices, teas, flavoured water, and sports drinks. So PepsiCo wanted to leverage that behavioural change by pumping up its Gatorade brand. Questions for Critical Thinking Gatorade was associated for years with male-dominated team 1. How can PepsiCo capitalize on what it has learned about the sports at the youth level. Now PepsiCo will link it to a wider range buying behaviour of young athletes? of consumers, including women, and a broader spectrum of other 2. Gatorade's president says, "We probably know more about athletic activities, such as skateboarding, surfing, tennis, and dance, who on Twitter is the most influential influencer of end user each represented by a professional athlete. The company recently athletes than Twitter does, because we've made it our busi- introduced the G Series, a product extension that offers three types ness to know that." What can social media tell PepsiCo about of Gatorade, one for each of three phases of athletic activity: Prime, the market for Gatorade? Perform, and Recover. Relying on marketing research revealing that high school and college athletes spend more on clothing and equip- Sources: "PepsiCo Bubbles to $71 by Pumping up Pepsi Next," Forbes, April 9, 2012, www.forbes.com; "Q&A with Sarah Robb O'Hagan, Global CMO and North ment than they do on nutrition products, PepsiCo is also unveiling a American President, Gatorade," Marketing, March 19, 2012, www.marketingmag new Gatorade marketing campaign featuring prominent athletes like .com: "Pepsi Can Bubble up to $71 But Needs Next Nooyi Thing," Forbes, Usain Bolt and Abby Wambach that stresses the importance of what February 21, 2012, www.forbes.com; Jennifer Rooney, "Sarah Robb O'Hagan Shares Gatorade's Strategy to Be Sports Nutrition Leader," Forbes, January 3, 2012, you put in your body, as opposed to what you put on it. www.forbes.com; Natalie Zmuda, "Gatorade's New Selling Point: We're Necessary Some Gatorade ads carried a hashtag, to help PepsiCo Performance Gear," Advertising Age, January 2, 2012, www.adage.com; David monitor social media buzz in its new Gatorade Mission Control Brown, "Infographic: Does This Mean Kanye Will Drink Pepsi?" Marketing, www -marketingmag.ca, February 25, 2013; "Pepsi Feels Shareholder Pressure to Buy centres in the United States, the United Kingdom, and Latin Mondelez," Marketing, www.marketingmag.ca, July 17, 2013