Powerade Case Study

Topics: Marketing, Target market, Coca-Cola Pages: 13 (3991 words) Published: December 13, 2010
Executive Summary

POWERade has traditionally focused on targeting bodybuilders and athletes. However, the target demographic is now shifting to more mainstream athletes and non-athletes; the marketing mix does not reflect these changes. We present a revised marketing plan that should increase revenue by 49% to $250 million a year. The marketing plan addresses the flagship product POWERade and POWERade Zero.

Through market research, we have discovered two key findings about this target market that will shape a new marketing strategy for POWERade. Our first key finding addresses what factors are important when choosing between sports drinks. Due to its focus on serious athletes, POWERade advertising has focused on the ingredients and benefits of its sports drink, touting itself as superior to rival Gatorade. This is ineffective for mainstream consumers – the most important factor in the buying decision is taste. This will come into play with promotions for POWERade. The second key finding involves the bottled water market. Bottled water is a $9 billion industry domestically, and expanding into this market could result in substantial financial benefits. However, survey data indicates that over 70% of respondents do not consider sports drinks a substitute for water. Thus, we propose marketing two different products: one aimed at the bottled water market and one at the sports drink market.

Marketing Strategy
We present a dual-pronged marketing strategy.
       POWERade will concentrate on solidifying its position in its current market and aggressively targeting more casual athletes, non-athletes, and women.        POWERade Zero will be marketed as a fitness water to the more mainstream health-conscious demographic POWERade. For POWERade, we know that we want to focus on taste. While no changes are needed to the POWERade formula, we propose clearly identifying the flavor on the label of the bottle (Mountain Blast, for example, is ambiguous). Promotions should be restructured to focus on taste rather than the ingredients. POWERade Zero. At launch, Zero was positioned as a diet sports drink. Instead, we suggest positioning it as a fitness water. By offering it at a price comparable to other bottled water market. The most important part of the Zero marketing share is to vastly expand coverage; take advantage of POWERade distribution channels to allow Zero to permeate the market. In addition, offer below-the-line advertising programs at health clubs to showcase Zero’s added benefits. Part I Introduction and Objectives

POWERade was first introduced in 1990 by the Coca-Cola Company. It is a sports drink - designed to rehydrate athletes as well as restore carbohydrates, B vitamins, and electrolytes drained during exercise. Up until 1990 the sports drink market had been dominated by Pepsi’s brand Gatorade, which is still the maket leader with 85% market share. However, POWERade is currently the second largest sports drink brand with 14% of the sports drink market. More recently (in 2005), Coca-Cola launched POWERade Option - a low calorie version of POWERade. Option contains about a fifth of the calories as its heftier counterpart, while still containing many of the same important nutrients. However, POWERade option ended up failing, most likely due to Gatorade’s introduction of “G2.” This then led Coca-Cola to develop POWERade Zero, which still remains on the market today. It boasts even less calories than “G2” ounce per ounce, yet seems to lack in overall taste satisfaction. Coca-Cola also manufactured an energy drink called POWERade Advance, but this is not a focus of this marketing strategy. However, with the popularity of Vitamin Water, there have been ideas to market a new energy-infused flavor of POWERade. This would be a similar concept to the Vitamin Water idea, by adding B6 and B12 to the existing formulas.

Problem Identification
Core Market Changes. POWERade’s core demographic...
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