Sports Drinks Industry Analysis

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Executive Summary

We have noticed an increasing number of businesses catering to the recent rise of a new target market: the health-conscious consumer. At Nike, our goal has always been to give consumers what they want now, as well as to anticipate their future tastes, and to thus tailor our strategy to accommodate those tastes. We have recognized an unfilled market potential in the non-carbonated energizing sports drink arena, thus developing an entirely new product category.

Our branding strategy is to enter the market by carving a new niche of protein-enriched energizing sports drinks. Our objective is to educate consumers about the new drink, as well as to make a profit and gain market share in the industry. We hope that by being market leaders, our name will become synonymous with the new drink category, and will aid in our sustaining a competitive advantage over the copy-cats that are sure to flock the market after the new products’ introduction and subsequent success.

Our primary target market is 18-34 year old females who will use our sports drink whenever they needed a boost: at work, in the gym, or just when they felt like it. The secondary target market is 18-34 year old males who fall into much the same socio-cultural and economic category as the primary target market. The Nike Motion energy drink will be positioned as a high-end item, costing $2 per environmentally-friendly can. It will come in a variety of fruit flavors and will boast the replenishment of electrolytes and other essential vitamins and minerals.

We hope that high-frequency mass market penetration using multi-media advertisements will spread the word and raise awareness about Nike Motion. National distribution will follow in supermarkets, pharmacies, health food stores, and gourmet retailers. The Nike brand name, accompanied by its strong brand image, will differentiate the product and maintain its popularity via the market leader and differentiation strategy the company has chosen.

[2.0] Environmental Analysis

Economic Trends:

The X and Y generations, our target markets, comprise about 110 million people of the United States population. They are, generally speaking, well-educated, and earn relatively higher incomes, thus allowing for much of their disposable income to be spent on health-oriented products, such as the new beverage we are planning to launch, Nike Motion.

Neither positive, nor negative economic trends, such as changes in interest rates, inflation, DGP, etc. are not likely to have a significant impact on our product, since it’s not a high priced luxury item whose demand would be affected by theses factors. The quality of sports drinks consumed doesn’t really depend on the income of the consumers, since these are relatively inexpensive, everyday products. As a general trend however it is worth mentioning that the economy as a whole is growing in the United States as well as in other parts of the world, allowing for an ever increasing standard of living.

Cultural and Demographic Trends:

Socio-culturally, our target market is health-conscious and youth-oriented. The individuals comprising our target market of 18-34 year old men and women, are generally perceived as individualistic, with a focus on making healthy decisions via food choices (salad bars and the organics market have boomed), and exercise (from going on athletics-oriented vacations, to spending lunch hours in the gym). There is also a change in the lifestyle of Americans, and people around the world: fast paced, always on the go, eating out and socializing more. These people rarely have the time to cook at home, decreasing the regularity of consuming healthy meals. One of the best alternatives of getting the needed vitamins and nutrition is via healthy beverages, such as Nike Motion. The U.S. population’s general aversion to high calorie, high sugar, and high carbohydrate beverages will likely be beneficial to our new...
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