Gatorade for the 50+ Market           MKTG 632        Group # ** - Gatorade       (Names of Group Members)          Decemb...
Executive Summary        The purpose of this proposal is to focus on the future of Gatorade and todemonstrate the advantag...
Table of ContentsI. Executive Summary…………………………………………………………………2II. Table of Contents ………………………………………………………………….. 3III. Mai...
Part One- Market ProfilePRODUCT CATEGORY        Sports beverage market was established to produce beverages, other than wa...
consumed to retain those minerals. This segment allows the company to gain high       exposure through sporting events, es...
Part 2: Target Segment        The segment of people aged 50 and over seems to be a highly attractive market. In theUnited ...
Age * Energy Drinks ranked usage Crosstabulation       Count                                              Energy Drinks ra...
reveals the potential for a possible Gatorade alternative involving a water product linespecifically targeting active pers...
Gatorade Opinion by Age Group                   100%                    90%   Percentage of   Respondents                 ...
Exercise Frequency                        9% 5%                rarely                                             once a m...
Sex * Willingness To Try Senior Beverage Crosstabulation                                   Count                          ...
Exercise Frequency * Water ranked usage Crosstabulation                  Count                                            ...
open area on the perceptual map. In addition, we want to generate more interest with ouradvertising.DISTRIBUTION        Ou...
Sources Used (not done properly)http://134.53.40.1/mkt/lesserja/FOXDM/Summit%20presentation.ppthttp://www2.coca-cola.com/p...
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Sample report 1

  1. 1. Gatorade for the 50+ Market MKTG 632 Group # ** - Gatorade (Names of Group Members) December 9th, 2002
  2. 2. Executive Summary The purpose of this proposal is to focus on the future of Gatorade and todemonstrate the advantageousness of considering, researching and possibly developing a newtarget audience for the Gatorade product line. In order to continue to be the market leader of thisparticular industry, Gatorade has to look in other directions as far as gaining new segments ordeveloping new market strategies. If they fail to do so, copy-cat products will slowly chip awaytheir market share and increase competition. “Backed by 35+ years of research, Gatorade hasproven rehydration and performance benefits over water and other beverages,” (GatoradeFacts). The brand is geared towards athletes who engage in intensive physical activities. Thecompany sponsors many professional sports leagues. Currently, Gatorade holds over 85% of thesports beverage market, so initially it seemed unreasonable for them to change the targetaudience that has continued to work for them. Yet, we saw an open area on our perceptual mapthat we felt Gatorade might want to explore: the age 50+ market. We conducted a survey to seeif the market would be receptive to a sports beverage product marketed towards them. Uponcompletion of the data analysis for our Gatorade survey, which screened for the active adult age50 and over demographic, the potential of a new target audience seems difficult to support.However, there are several findings from the survey that supports the possibility of starting aGatorade water product line which targets active persons age 50 and over. Perhaps, they couldeven change their current “Propel” bottled water line to target the active persons age 50 and overmarket. Some of the more significant findings are as follows: 1. 50% of the 44 active persons age 50 and over who returned a complete and acceptable response to an exercise frequency question reported that they exercise once a day. 2. 71% of the 28 active females age 50 and over who returned a complete and acceptable response to the willingness to try question would try a sports beverage that targets their age demographic. 3. 92% of the 24 persons age 50 and over who exercise at least once a day and returned a complete and acceptable response to the water ranked usage question consume water more often than any other drink before, during or after exercise.These statistics support the recommendation that Gatorade could start a new bottled waterproduct line or change its Propel bottled water product line to target females age 50 and overwho exercise once a day. 2
  3. 3. Table of ContentsI. Executive Summary…………………………………………………………………2II. Table of Contents ………………………………………………………………….. 3III. Main Body of the Report i. Part 1: Market Profile ……………………………………………………………4-5 ii. Part 2: Target Segment ………………………………………………………….6 iii. Part 3: Consumer Behavior …………………………………………………….6-12 iv. Part 4: Recommendations ………………………………………………………12-13 v. Sources Used ……………………………………………………………………14IV. Appendix i. Preliminary Proposal ……………………………………………………………...15-17 ii. Final Proposal ……………………………………………………………………18-23 iii. First Draft of Questionnaire ……………………………………………………..24-27 iv. Final Draft of Questionnaire …………………………………………………….28-31 v. Demographic Tables & Charts …………………………………………………...32-34 vi. Additional Tables & Charts ……………………………………………………..35-52 vii. Completed Questionnaires (located in other binder)…………………………… end viii. SPSS Table of Coded Data …………………………………………………….53-64 ix. Powerpoint Slides ……………………………………………………………….65-67 3
  4. 4. Part One- Market ProfilePRODUCT CATEGORY Sports beverage market was established to produce beverages, other than water or juice,for athletes to drink while exercising or playing sports. These types of products have specialingredients such as vitamins and electrolytes to increase performance levels. Water may keepyou from being dehydrated but it doesn’t provide you with the minerals lost while sweating.Juices contain too much sugar and carbohydrates, which could slow you down. Athletes areconstantly looking for ways to sustain or increase their level of performance. Luckily, Gatoradeand Powerade have been able to supply these athletes with drinks that contain the necessaryingredients to help their bodies regain energy needed to finish that crucial 4th quarter or 9th inningto win a championship.MARKET SIZE According to the Bureau of Labor & Statistics, there are at least 1 million professionalathletes in the United States. The number of non-professional athletes is estimated to be twice asmuch as the paid professionals. The growth rates of this market continue to grow at a consistentrate because more and more people participate in sports every year. Sports beverage companiesmust forecast their marketing strategies to meet the demands of this growing segment.COMPETITIVE STRUCTURE OF THE MARKET The competitive structure of the market follows consumer preferences as they changeover time. Companies are constantly monitoring consumer behavior to determine what theyneed to do to accommodate the consumers’ needs as far as flavors, effects from content, pricing,packaging, and etc. The first to introduce a consumer inspired product usually captures a bigchunk of the market share. The brands that follow suit, slow captures some of the market sharebut hardly ever dominates because consumers tend to be brand loyal in this market, and arehesitant to try new products.COMPETITORS The primary competitors in the sports drink market are Powerade and All Sport.Powerade is the main competitor of Gatorade. Powerade and All Sport are discussed further inthe ‘Market Leaders’ section.TARGETED SEGMENTSPrimary Target- Professional/Non-professional athletes This group of people play sports and exercise 1.5-4 hours, 4-7 days a week. During those strenuous workouts, a lot of vital fluids are being lost and sports beverages are being 4
  5. 5. consumed to retain those minerals. This segment allows the company to gain high exposure through sporting events, especially those that are being televised worldwide.Secondary Target- Physically active people According to the website “Body and Fitness,” people who want to lead a healthy life, needs to participate in cardio activity 3-5 days a week for at least an hour. This segment contains a large number of people who are consistently thinking about their health and will follow a consistent fitness program that will keep them in shape. Sports beverages will be there to help assist them in their life-long goal of being fit.LEADERS & FOLLOWERS Gatorade is the market leader for the sports beverage industry because it holds over 80%of the market share. Since the launch of their product this company has been able to increasetheir revenue annually through sponsoring worldwide sporting events, using high profile athletesas their spokespeople, and improving their products to give athletes what they need to perform ata high level. Powerade is the second company to introduce a beverage similar to Gatorade with anemphasis on containing Vitamin B. It captures less than 20% of the market share and wasrecently bought by Coca-Cola. Recently, it has been reported of having a growth increase of20% (Coca-Cola). Powerade is redeveloping their marketing strategy to better compete againstGatorade and to increase their market share in the near future. All Sport, formerly owned by Gatorades company Pepsi, is another sports beverage thatcontains the most vitamins such as Vitamin C, B6, and B12. The drink contains the same type ofingredients as Gatorade, but has lesser electrolytes and more vitamins. It is currently rank #3 inthe market and holds 9% of the market share (Monarch Beverages). The brand is currentlyextending their product line, which will be launching in 2003.BASES OF SEGMENTATION & OPPORTUNITIES Besides marketing to athletes in the age range of 18-35, Gatorade is expanding its line toother segments: younger kids/athletes aged 8-12 and the Latino Market. Gatorade understands that kids usually engage in physical activities during recess or afterschool play and they tend to get dehydrated quickly (Pepsi Co.). Children need to consume atleast 12 ounces of fluid to stay hydrated. As a result, the company has produced Gatorade insmaller sized bottles and appealing flavors for this younger market. Gatorade has also recognized an opportunity in the Latino market with the populationestimated at 35 million. They introduced Gatorade Extremo with exotic flavors like Mango,Tropico, and Citrico which also has the same ingredients of the original Gatorade (Pepsi Co). Since Gatorade has been able to look beyond the market of the athletes, they should seethat there is an opportunity to market their product to people aged 50 and over. The BabyBoomer generation is the largest generation in history, therefore this could be a very lucrativemarket to target. We believe that there is great potential within this segment because as peopleget older, they become more aware of how important it is to lead a healthy life. Therefore, thesepeople will do whatever it takes to lead a healthy lifestyle. 5
  6. 6. Part 2: Target Segment The segment of people aged 50 and over seems to be a highly attractive market. In theUnited States alone, there are 45+ million people in the age range of 50 and over. According tothe 1997 Lifestyle Market Analyst, older adults frequently engage in these types of activities:tennis, running/jogging, golf, walking, and snow skiing (Gatorade Summit). Although theseactivities are not as intensive, these people still need some sort of fluid replenishment. With abeverage like Gatorade, they will be able to achieve long endurance and enjoy such activities. According to the Fact Book on Aging, people 65 and over, spend 5.7 hours shopping perweek, and persons aged 55 to 64 spend 6.5 hours in comparison (Gatorade Summit). This isbeneficial for Gatorade because these individuals still have to shop for groceries and often timeshave more time to do it than younger individuals since many of them are retired. With years ofexperience as a consumer, this particular segment knows what brands are good and which brandsare not as reliable. This indicates that they tend to be very brand loyal especially if they startedusing/ consuming a brand during the earlier part of their life. We feel that Gatorade can further dominate the beverage industry if they market theirdrink towards this segment because of its large population, consumption experience, and brandloyalty. Because of past success in introducing their product to a new market such as the Latinomarket, this should encourage them to explore the market of people aged 50 and over. Inconducting further research by distributing surveys to people in the SF Bay Area, we will be ableto determine whether or not it will be beneficial for Gatorade to extend their product line to thissegment. Part 3: Consumer BehaviorManagement Decision Problem: Should our Gatorade Unit try to reposition itself to targetathletic persons ages 50 and over? • Gatorade currently holds 80% of the sports drink market. If it were to change its target consumer that 80% has a high risk of declining, and immediate rapid growth doesn’t seem supportable when targeting active persons over 50 considering the statistics below.Gatorade should reject idea to change target audience to active persons over 50 years of age.This statistic alone is enough for Gatorade to keep its current target audience which hasawarded it 80% of the US sports drink market. 1. 81% of the 43 active people age 50 and over who returned a complete and acceptable response to a ranked usage question don’t consume any energy drinks at all. 6
  7. 7. Age * Energy Drinks ranked usage Crosstabulation Count Energy Drinks ranked usage not consumed consumed consumed consumed often sometimes rarely Total Age 50-55 25 3 1 1 30 56-60 5 2 1 8 71 and over 5 5 Total 35 5 2 1 43This statistic exhibits the lack of promise in the male portion of the active persons age 50 andover target group. 2. 62.5% of the 16 males age 50 and over who returned a complete and acceptable response to a willingness to try question would never try a senior sports beverage that targets them. Sex * Willingness To Try Senior Beverage Crosstabulation Count Willingness To Try Senior Beverage no yes Total Sex male 10 6 16 female 8 20 28 Total 18 26 44This statistic represents the low usability of Gatorade sports drinks before, during or afterexercising for active persons age 50 and over who exercise once a day. 3. 83% of the 46 active persons age 50 and over who exercise at least once a day and returned a complete and acceptable response to an energy drink rank question have not consumed energy drinks before, during or after exercising. Exercise Frequency * Energy Drinks ranked usage Crosstabulation Count Energy Drinks ranked usage not consumed consumed consumed consumed often sometimes rarely Total Exercise rarely 3 1 4 Frequency once a month 2 2 once a week 13 1 1 1 16 once a day 20 3 1 24 Total 38 5 2 1 46This statistic represents the favoritism of water before, during and after exercising at least oncea day for active persons over the age of 50 over any other drink. However, this statistic also 7
  8. 8. reveals the potential for a possible Gatorade alternative involving a water product linespecifically targeting active persons over the age of 50. 4. 92% of the 47 active persons age 50 and over who exercise at least once a day and returned a complete and acceptable response to a water ranked usage question consume water more than any other drink. Exercise Frequency * Water ranked usage Crosstabulation Count Water ranked usage most consumed consumed often Total Exercise rarely 4 4 Frequency once a month 2 2 once a week 14 3 17 once a day 22 2 24 Total 42 5 47Research Problem: To determine the potential market and sales of targeting athletic personsover 50. • Even though the market and sales do not seem promising for the Gatorade product line for persons over 50, a new water product line does seem potentially profitable.Research Question: Will Gatorade be able to improve its market share in the sports beveragemarket and increase its profits substantially? • For a new Gatorade water product line, the market of active persons over 50 seems promising when considering the statistics shown below.Gatorade should consider starting a new water product line or take its new water product linePropel and target active females ages 50 and over.This statistic exhibits illustrates the brand recognition and popularity of Gatorade products ingeneral. 1. 71% of the 27 active persons age 50 and over who have tried Gatorade products and returned a completed and acceptable response to a Gatorade opinion question generally like Gatorade products. 8
  9. 9. Gatorade Opinion by Age Group 100% 90% Percentage of Respondents 80% 70% 60% dislike 50% 40% like 30% 20% 10% 0% 50-55 56-60 71 and over Age Group Age * Gatorade Opinion Crosstabulation Count Gatorade Opinion not tried no opinion dislike like Total Age 50-55 9 6 15 30 56-60 3 3 1 7 71 and over 2 1 1 4 Total 14 1 10 16 41The more frequently members of the target audience exercise, the more the thirst need isrecognized and has the ability to be fulfilled. This statistic displays the opportunity for thirstneed fulfillment in the active persons age 50 and over demographic. 2. 50% of the 44 active persons age 50 and over who returned a complete and acceptable response to an exercise frequency question reported that they exercise once a day. Age * Exercise Frequency Crosstabulation Count Exercise Frequency rarely once a month once a week once a day Total Age 50-55 3 1 14 13 31 56-60 1 1 1 5 8 71 and over 1 4 5 Total 4 2 16 22 44 9
  10. 10. Exercise Frequency 9% 5% rarely once a month 50% once a week 36% once a dayThis statistic demonstrates the promising future that lies in targeting active persons age 50 andover with a Gatorade water product line. 3. 58% of the 43 active persons age 50 and over who returned a complete and acceptable response to the willingness to try question would try a sports beverage that targets their age demographic. Age * Willingness To Try Senior Beverage Crosstabulation Count Willingness To Try Senior Beverage no yes Total Age 50-55 12 18 30 56-60 2 6 8 71 and over 4 1 5 Total 18 25 43 Willingness to try New Sports Beverage 42% no 58% yesThis statistic supports the theory of effectiveness in targeting active females age 50 and overinstead of males. 4. 71% of the 28 active females age 50 and over who returned a complete and acceptable response to the willingness to try question would try a sports beverage that targets their age demographic. 10
  11. 11. Sex * Willingness To Try Senior Beverage Crosstabulation Count Willingness To Try Senior Beverage no yes Total Sex male 10 6 16 female 8 20 28 Total 18 26 44 Willingess to try New Sports Beverage by Gender 80% Percentage of Respondents 60% male 40% female 20% 0% no yes Response by GenderThis statistic also supports targeting a female over 50 market. 5. 52% of the 17 active females age 50 and over who have tried Gatorade and returned complete and acceptable responses to the Gatorade opinion question generally like Gatorade products. Sex * Gatorade Opinion Crosstabulation Count Gatorade Opinion not tried no opinion dislike like Total Sex male 6 2 2 6 16 female 9 8 9 26 Total 15 2 10 15 42This statistic is an expected one, however it does show the potential of starting a water productline that targets active females over 50 or changing Gatorade’s current Propel water line. 6. 92% of the 24 persons age 50 and over who exercise at least once a day and returned a complete and acceptable response to the water ranked usage question consume water more often than any other drink before, during or after exercise. 11
  12. 12. Exercise Frequency * Water ranked usage Crosstabulation Count Water ranked usage most consumed consumed often Total Exercise rarely 4 4 Frequency once a month 2 2 once a week 14 3 17 once a day 22 2 24 Total 42 5 47 Part 4: RecommendationsPRODUCT POSITIONING We recommend that Gatorade not reposition its primary product (Gatorade) to targetpeople who are 50 years and older. Yet, we feel that they may want to create a new line of waterspecifically targeting women age 50 and over.PRODUCT STRATEGY Our potential customers need to be aware that hydrating yourself is important. Since theyare physically active, it is important that they drink the proper liquids to stay hydrated andreplenish nutrients that their bodies have lost. Luckily, the Gatorade water line will provide allthe essential nutrients necessary for aging active adults. The new water line by Gatorade will beoffered in a squirt bottle that is made out of plastic, which seems to be the preferred packaging ofour survey respondents.PRICING For one bottle of Gatorade we will charge $1.50 and this will come in a 20 oz. size. Weknow that people who are 50 and older don’t like to spend a lot of money, and we have tried toprice our product accordingly. We don’t want to make our customers feel that they are payingtoo much for the product. So, our price will be similar to our competitors in the water market.In fact, we are actually priced below some of our competition.PROMOTION Since this is a new product it is very crucial that we heavily advertise, and do numeroussales promotions. We need to advertise to let our target audience know that there is a productout there like ours, and let them know the benefits that come along with using our product. Asfor the sales promotion we can give out free samples or coupons so that people will try ourproduct. This will help them to discover how our product tastes and how it can benefit them.For our advertising objectives, we want to increase brand awareness by 10 %. Although mostpeople have already heard about Gatorade, we feel that the target age group has not beenmarketed to, which may have prevented them from trying it. We are basically trying to fill an 12
  13. 13. open area on the perceptual map. In addition, we want to generate more interest with ouradvertising.DISTRIBUTION Our product will be available at all supermarkets like Albertson’s and Safeway andconvenient store chains, like 7-11 and AM/PM. If we can get contracts with gyms, such as 24-Hour Fitness, we would like to sell our product there as well. These forms of distribution will besuitable for our product, because the target market already goes to these places to buy beveragesand other necessities.IMPLEMENTATION & FEASIBILITY The money for our proposed plan is coming from Pepsi Co., who owns Gatorade, whichwill supply us with enough money to start the new line of Gatorade waters. (Quaker Oats ownsGatorade, and Quaker Oats is owned by Pepsi Co.) We will be able to implement our plan rightaway, because we have the money and the facilities to start making our product right away. Yet,we feel it would be best if Gatorade continued doing research along the way to make sure theyare best fulfilling their target markets needs and wants. 13
  14. 14. Sources Used (not done properly)http://134.53.40.1/mkt/lesserja/FOXDM/Summit%20presentation.ppthttp://www2.coca-cola.com/presscenter/earnings04162002.htmlhttp://www.bls.gov/news.release/ocwage.nr0.htmhttp://www.bodyandfitness.com/Information/Fitness/Research/research.htmhttp://documents.gatorade.com/gatorade_timeline.pdfhttp://www.gatorade.comhttp://my.webmd.com/content/article/1676.55034http://oak.cats.ohiou.edu/~ml428298/esp/memo2.htmhttp://www.pepsico.com/investors/annual-reports/2000/quaker.shtmlhttp://www.pepsico.com/investors/annual-reports/2001/worldwide_beverages4.shtmlhttp://www.pepsico.com/news/gatorade/2002/20020321g-english.shtmlhttp://www.pepsico.com/news/gatorade/2002/20020606g.shtmlhttp://www.pepsico.com/news/gatorade/2002/20020909g.shtmlhttp://www.quakeroats.com/qfb_OurBrands/Gatorade/GatoradeThirstQuencher.cfmhttp:// www.monarchbeverages.com 14

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