Sunday, July 22, 2012

“Gatorade Goes Back to the Lab” Business Week, November 23, 2011

Analysis Report



PepsiCo, which owns Gatorade, is aiming to diversify the brand beyond beverages. Gatorade currently is one of the biggest players in the $7 billion sports drink and they now want to extend their presence in to the $20 billion U.S. sports nutrition industry. In order to penetrate the sports nutrition industry which consists of sports drinks, protein bars and supplements, Gatorade has to expand its brand equity .The recent brand’s logo change to a simple “G” makes Gatorade easy to use on a wide range of products. Gatorade should not do the same mistake they did by adding the “Prime” and “Recover” beverages to the existing product line (G and G2). It always causes consumer confusion and because of this confusion, consumers are more likely to choose a simpler alternative. When they want to bring a product line extension it should  accomplish at least one  of the following two things: expand the size of the market and/or expand the number of a brand’s product offerings that a given consumer purchases.

Gatorade should aim to bring a positive   Customer-based brand equity , they can do that by involving athletes like Wade during product launch and they should let the consumers know that they were customizing a whole new nutrition program for Wade to deal with the physically demanding nature of the game. So better performance from the athletes help in improving brand image for the company’s products . Brand knowledge is very important to expand brand equity, Gatorade should give free samples of their nutrition bars when consumers buy their existing Gatorade beverages . Free sampling is a great technique to grasp the attention of the customers. Even if the customers are not in need of a product, they always love to get free which provides companies an advantage to penetrate into their minds. Gatorade should offer coupons like “buy 1 get 1 free,50% off on any of their nutritional bars/supplements” .By distributing the freebies/coupons, Gatorade will make people know about them as well as it also allows them to gather important market information like spending patterns of customers, about its competitors, strong and weak points of the other companies and also allows them to price the product; so, it cover their targets.  If the customer feels that the product is of use and is working according to the requirement then it is more likely that the customer will recall his experience with the freebie and is expected to go for a purchase.
To build a successful brand equity Gatorade should have a right selection of brand elements. Gatorade’s nutritional products name should be memorable, meaningful, and likable to build the brand and the name to be transferable, adaptable and protectable to help leverage and preserve brand equity. Since Gatorade’s energy bars, gels, shakes are made from natural ingredients like fruit extracts, nuts they should focus on fresh looking packaging of its new nutritional products instead of their traditional G logo with some red/yellow/black background. Gatorade should start rewards points system like their competitor coke rewards wherein they can encourage consumers to buy more to get more points . One way to expand brand awareness is to increase the use of the Gatorade brand , they can do this by making the product easier to use-like “small Fun size” packaging and they should link their nutritional products with a benefit like “Supporting Breast Cancer” .
Gatorade should use social networking websites to create awareness of its new products to its Gatorade fans by doing this Gatorade can establish a strong brand community which will result in a more loyal, committed customer base. Gatorade should sponsor Weight loss programs/contests through which they can advertise their new nutritional products. Gatorade should work with big retailers like Wal-Mart to bring these energy bars/chewable near the checkout area which virtually guarantees that the consumer will see the new brand name and the product. This undoubtedly increases brand awareness of Gatorade.
For Gatorade branding strategies to be successful and brand value to be created, consumers must be convinced there are meaningful differences among Gatorade’s three-step drink plan of Prime, Perform and Recover. Gatorade can be a cash cow for Pepsi if it can successfully compete in an ever-growing sports nutrition sector and expand its brand equity by following the recommendations mentioned above.

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