Gatorade: Marketing Channel Analysis

Gatorade is a sports beverage designed to replace electrolytes and carbohydrates lost while exercising. Gatorade is owned and produced by PepsiCo and is positioned to be sold at supermarkets and convenience stores. The thirst quenching drink is sold as a high performance sports beverage in 80 countries world wide, with over 50 flavors. Gatorade can be found anywhere that Pepsi products are sold. PepsiCo manufactures a flavor concentrate that it ships to independent bottling facilities. The bottling facilities then mix the final product, bottle it in packaging supplied by an independent supplier, and distribute it to the various retailers. Gatorade is priced slightly lower than its main competition, POWERade. PepsiCo keeps very close control over the pricing of its products, ensuring that every channel member makes a profit. Product promotion for Gatorade is focused in three areas, media advertising, event sponsorship, and contests. The main competitor for Gatorade is the Coca-Cola product, POWERade. Currently Gatorade seems to have the upper hand because it is experiencing sales growth while POWERade is not expecting any growth in the next year. Gatorade keeps its competitive edge through product innovation. All of Gatorade's product research takes place at a special facility called the Gatorade Sports Science Institute, use of this resource will help to maintain Gatorade's competitive edge in the years to come.

1. Introduction

Gatorade was the first widely used sports drink in the United States. It was developed in 1965 for the Florida Gators football team by a group of four university physicians (The History of Gatorade, 2007). The Gatorade formula was proven to be effective when the Florida Gators started winning against heavily favored teams by outlasting their opponents in the heat. From there orders for Gatorade started coming in from other college football teams and now Gatorade is one of the most widely used sports drinks in the world.

Gatorade is owned by PepsiCo and is produced in the same facility as the many other beverages sold by Pepsi. A huge part of the success of Gatorade in today's market is promotion. Gatorade uses endorsements by stars in many sports from soccer to race car driving to promote their product. Another huge factor in Gatorade's success is PepsiCo's channel control and support.

2. Image

Positioning a product is a manufactures attempt to have consumers perceive their product in a particular way, relative to competitive products (Rosenbloom, B, 2004)). Essentially, their product is ‘positioned' as an alternative to the product the consumer currently uses. The most important factors in positioning products are where and how they are going to be sold. Gatorade products are positioned to be sold at supermarkets and convenience stores and are either stocked on the shelf with a large amount of variation of Gatorade flavors, or in a trendy eye-catching point-of-purchase display. PepsiCo would like Gatorade to have a perceived image as a healthy alternative to carbonated soft drinks and as well as a thirst quenching drink to accompany any physical endurance activity.

Gatorade's value proposition is a high performance sports drink that will hydrate your body and rejuvenate your electrolytes (Packaged Design, 2007). PepsiCo does not provide any warranty or guarantees on their Gatorade products, but offers a scientific validated blend of carbohydrates (6% carbohydrate blend, 14 grams per 8 0z) and key electrolytes (including the proper amount of sodium at 110 mg at 80z) to replace fluids and provide energy to working muscles (The Gatorade Company Fact Sheet). Looking further down the distribution channel however, we find that supermarkets and convenience stores that carry Gatorade will fully refund a consumer of their Gatorade purchase if something is wrong with the bottle or the drink itself, as long as it is accompanied with a receipt. If a purchased Gatorade is returned and a...