Powerade plans book 1


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Powerade plans book 1

  2. 2. 1 2 TABLE OF CONTENTS Executive Summary Situation Analysis Company Analysis Consumer Analysis Market Analysis Product Analysis Competitive Analysis SWOT Objectives Positioning Statement Marketing Communication Strategy Creative Strategy Target Marget Media Strategy Media Tactics Sales Promotions Other MarComms Budjet Campaign Evaluation References Appendix Sales Trends Environmental Trends Skills & Resources
  3. 3. 3 4 EXECUTIVE SUMMARY The Coca-Cola Company is one of the largest beverage manufacturers in the world. Its highly recognizable brand name and logo along with an immense presence in popular culture contribute to its invaluable brand equity. While Coca-Cola dominates PepsiCo in the non-alcoholic beverage category, PepsiCo’s Gatorade controls the sports drink category and has consistently posed unsurpassable competition to Coca-Cola’s Powerade. Our consumer insights revealed that despite overall loyalty to Coca-Cola, high brand loyalty to Gatorade poses a significant barrier to encouraging consumers to switch brands or increase their consumption of Powerade. We hope to overcome this obstacle by reinvigorating Powerade’s marketing strategy. Due to societal shifts, the sports drink category as a whole has potential to grow as consumers seek to lead healthier and more fit lifestyles. As a result of a greater number of active consumers, Coca- Cola has the opportunity to gain additional market share and brand awareness among new and existing consumers with the Powerade brand. We intend to expand our consumer base by targeting young (13-24 years old), passionate, and active individuals--more specifically, the amateur athlete striving for success. Because we are hoping to capture these impressionable consumers as consistent Powerade users early on, we expect to elicit unwavering brand loyalty as they continue to use the product for years to come. Although Powerade has experienced revenue growth in recent years, it has been aligned with overall category growth, showing that they are not gaining share relative to their main competitor, Gatorade. According to our consumer insights found through focus groups, Powerade’s current marketing, which consists mostly of television advertising, is contributing to their failure to catch up to Gatorade’s dominance. Overall, Powerade’s advertising is unmemorable among our target consumers, who hold largely unfavorable perceptions of Powerade as compared to Gatorade and fail to understand the specific benefits of Powerade. Our consumers consistently choose Gatorade because of their heart loyalty to the brand. Thus, we believe that highlighting specific nutritional benefits of Powerade while portraying a relatable and desirable image will cause our target consumers to reassess their sports drink preference. The Powerade ION4 brand must differentiate itself from its main competitor in order to garner the trust of its own loyal consumers and establish brand equity. Our campaign’s primary marketing objective is to increase market share by stealing share from our main competitor, while we also aim to reposition the Powerade brand in our target consumers’ minds. The new Powerade campaign will highlight the ION4 formula components by giving each electrolyte in Powerade’s formula a unique character and personality. Using three young Olympians, who each embody a different electrolyte, Powerade will make the athletes come alive to reflect the attributes of the electrolyte they represent. Finally, to encourage interaction with our target market, young, undiscovered athletes can enter our nationwide “Find the 4th” competition in order to win the chance to represent the brand as the fourth electrolyte. As the campaign comes to a close, consumers will know in their minds and their hearts that Powerade is no longer the inferior sports drink brand. SITUATION ANALYSIS This situation analysis looks at the ready-to-drink sport drink market with a particular emphasis on the Powerade brand, which is owned by Coca-Cola, Inc. Included in this section is an in-depth analysis on the Powerade brand with specific focus on a company analysis--including sales, environmental trends and skills and resources--current consumer analysis, product analysis, and competitive analysis.
  4. 4. 5 The functional and natural beverage category industry has seen overall growth from 2006 to 2010. In 2010, aggregated retail sales of energy drinks, sports drinks, and functional waters were up to $23.4 billion from $18.9 billion in 2006. Despite an intervening recession, which saw many consumers tighten their discretionary spending, the category grew by a compound annual growth rate (CAGR) of 5.5% (MarketResearch, 2011). The sports drink segment specifically has experienced growth from 2006 to 2010. In 2010 alone, the segment increased 811.0%, reaching $1.706 billion. The two major players, PepsiCo (the Quaker Oats Company) and Coca-Cola together account for 98.5% of all sales in the sports drink category. PepsiCo’s Gatorade dominates the category with $1.3 billion in sales and a healthy 6% growth rate, which equates to nearly 76% of the market share. On the other hand Coca-Cola’s Powerade follows with 23% share in 2010, based on $393 million in sales and a robust 28% growth rate (MarketResearch, 2011). Sports drink manufactures have positioned their products in recent years to reduce the conceptual divide between scientifically engineered “functional” beverages (sports drinks) and “natural” beverages (coffee, tea, and water). The number of “natural” claims in new sports drink products is at 35%, while in comparison, 49% of the refrigerated yogurt drinks or fruit/vegetable smoothie drinks make similar claims (MarketResearch, 2011). Emerging from a rebounding economy at the turn of the latest decade was a new group of health conscious consumers. A 2011 Datamonitor consumer survey revealed that over 80% of consumers around the world expressed interest in buying healthier food and beverages (Marketline, 2011). Their lifestyle habits reflected a higher need for natural and healthier consumption options as well as improved activity schedules. The sports drink category was in a position to capitalize on these new trends, both from a drink consumption standpoint as well as making consumers feel energized to increase physical activity. While sports drinks have always contained benefits beyond hydration, the industry created marketing efforts to emphasize the individual properties of esoteric vitamins and minerals (MarketResearch, 2011). Coca-Cola took advantage of the market shift with their Powerade brand and began to highlight the health benefits while Gatorade continued to be marketed as a “social beverage.” First- mover advantages of repositioning the product allowed Powerade to realize greater market share growth than Gatorade in the past five years (MarketResearch, 2011). Using scientific formulation, Powerade introduced the ION4 line, which contains four essential electrolytes: sodium, potassium, calcium, and magnesium (Marketline, 2011). While the increase in health conscious consumers was the largest opportunity for Powerade to capitalize on, they also took advantage of the growth in the U.S. Hispanic population as it was still an untapped user base. In 2010, Powerade became the official drink provider of FIFA to hydrate players during the 2010 FIFA World Cup (MarketResearch, 2011). The marketing efforts for the soccer market was to attract this growing segment of Hispanic immigrants now living in the U.S. Due to the demographic having a higher probability of performing labor intensive jobs, they were an ideal target for a rehydration product (PR Newswire, 2012). COMPANY ANALYSIS The Coca-Cola Company is the one of the world’s largest beverage manufacturers, with revenues of $46,542 million in 2011. The company produces over 3,500 products including sparkling beverages, juices, waters, sports drinks, teas and coffee. The Coca- Cola Company owns four of the five top nonalcoholic beverage brands, including Coca-Cola, Diet Coke, Sprite, and Fanta. The only competing beverage to come close is Pepsi (PepsiCo), which is the second top-selling beverage behind Coca-Cola. Further, Coca-Cola and Diet Coke outsell their Pepsi counterparts by more than two to one. Coca-Cola’s other billion dollar brands include Coca-Cola Zero, Minute Maid, Dasani, Powerade, and Vitamin Water, among others (Mintel, 2013). Being the world’s largest seller of soft drinks, Coca-Cola has various skills and resources that contribute to its success. The strong brand variety listed above leads to Coca-Cola’s strong market presence, which has been steadily increasing in sales and profitability. From 2010 to 2011, the company recorded an increase of 32.5% in revenue to reach $46,542 million (Mintel, 2013). A chart with sales and total assets information from the last five recorded years can be found in Figure 1. During 2012, The Coca-Cola Company’s higher global volume led to a 5% increase in income from $8.584 million to $9.019 million. The company grew in global volume and value share in beverages across almost every nonalcoholic ready-to-drink beverage in their category (Mintel, 2013). Other resources that contribute to Coca-Cola’s dominance in the industry include a strong bottling partnership called the Coca- Cola system. This network allows the company to produce different products for the right channels and consumers, thereby maximizing efficiency of production and increasing sales. The company also invests in providing expertise and resources to strengthen the business of bottling partners. (MarketLine, 2012.) Finally, Coca-Cola’s efforts towards being a sustainable company include reducing the impact of their packaging on the environment. In 2009, they created and introduced a PET bottle, the PlantBottle, which contains 30% renewable plant-based PET and is fully recyclable. Coca-Cola hopes to use solely PlantBottle packaging in every plastic bottle sold by 2020 (Passport, 2012). Further, Coca- Cola uses strategies to reduce risks of water stress in its operations. The company’s operations use only 1% of its “product total water footprint,” with 99% of water needs occurring at the “raw material level in order to produce packaging, sugar, and other ingredients” (Passport, 2012). SALES TRENDS ENVIRONMENTAL ANALYSIS SKILLS & RESOURCES Figure 1: Coca-Cola Total Sales, 2013-2017
  5. 5. CONSUMER ANALYSIS North America accounts for the most significant portion of global sports drink sales according to Euromonitor International’s analysis of the sports drink category in 2009 (see Figure 2). The primary consumers of sports drinks in the U.S. are men ages 18-24, households with children, and teenagers (Mintel, 2012). Of the male consumers, 61% of 18-34 year-old respondents from the January 2013 Experian Simmons NCS/NHCS survey drink Powerade. Less than half of female respondents (44%) drink Powerade and Powerade Zero. Younger adults and teenagers have also become frequent consumers of Powerade because they have a greater affinity for sweet drinks, a higher level of athletic participation, and less concern over sugar and caloric intake. Households in the $50K-99.9K range are most likely to report usage of Powerade products (Mintel, 2013). This fact can be linked to children participating in sporting events, as seen in Figure 3 (Mintel, 2012). Powerade’s consumers are also on the run, making them more likely to agree that fast food fits their lifestyle and that they are too busy to take care of themselves (Packaged Facts, 2011). Athletic participation is a common characteristic among those who consume Powerade (Mintel, 2012). Consumers who report that they exercise are almost twice as likely to consume performance drinks than those who do not exercise. These results are not surprising given that performance drink brands are formulated around consumers that require rehydration--from sports drinks like Powerade--after physical activity. Those who report low levels of physical activity and drink Powerade do so for general rehydration purposes or simply for the taste of the beverage. Because of such an emphasis on athleticism and hydration in their lives, Powerade consumers look for and value energy boosting qualities, vitamins and minerals, electrolytes, and protein in their performance drinks (Mintel, 2013). Based on Experian Simmons NCS/NHCS survey data (2008- 2012), the average frequency of consuming sports drinks is 4.48- 4.63 glasses. More than half of the male respondents have had at least five glasses over the past 30 days. The difference in frequency of consumption is more pronounced by age than gender, which can be seen in Figure 4. Consumers in the 18-24 age group who drink sports drinks consumed at least ten glasses within the last 30 days compared to less than four glasses consumed by those aged 65 and over (Mintel, 2012). In terms of purchase location, consumers buy Powerade at supermarkets, Walmart, Target, convenience stores, warehouse clubs, and drugs stores. Purchasing beverages in bulk, as opposed to individually, from warehouse stores suggests that consumers have incorporated the product into their daily routine. One quarter of consumers who earn less than $25K report that they purchase other brands of performance drinks, as seen in Figure 5. This hints at the importance of price. Private label or less mainstream brands appeal to lower-income consumers who are price sensitive (Mintel, 2013). Vending in the workplace and school is another channel through which consumers purchase Powerade, as Mintel (2013) data states that 68% of users purchase Powerade from vending machines. Figure 2: Sports Drink Sales by Region: % Total RTD Volume 2009 Figure 3: Purchase & Use of Sports Drinks by Households with Children, 2012 Figure 4: Personal Comsumption of Performance Drinks by Gender & Age, 2012 Figure 5: Household Consumption of Performance Drinks by Income, 2012
  6. 6. PRODUCT ANALYSIS Powerade has two product lines currently on the market: Powerade ION4 and Powerade ZERO, which is Powerade’s zero sugar option. See Appendix A for full product line information and flavors. Based on the Executive Summary of Sport Drinks in the U.S. from September 2012 (Mintel), sales trends have shown sport drinks to be on the rise. As seen in Figure 6, there is a somewhat steady rise in sales for diet sports drinks from 2008 that is forecasted to continue into 2017. Apart from a dip in sales between 2008 and 2009, regular sports drink sales have steadily risen, although a plateau in sales did occur between 2011 and 2013. Though sales are rising more rapidly for diet sports drinks, Mintel is forecasting significant growth in regular sports drink sales starting in 2014. Based on Figure 6, sports drinks are still in the growth stage of the product life cycle (introduction, growth, maturity, decline). Mintel projects the market for sports drinks to grow by 52% from 2013-2017. Diet sports drinks will lead this growth as Americans continue to place more importance on health and wellness (Mintel, 2012). The distribution channels for sports drinks are vast, including a variety of supermarkets, drug stores, convenience stores, dollar stores and club stores. Sales in 2009 dropped across the board (see Figure 7) and no distribution channel was immune to the decline. However, as growth returned to the market in 2010-11, supermarkets and drug stores did not see the double-digit growth that convenience stores and other retailers experienced. While supermarket sales grew from 2010-2012, convenience stores outpaced supermarkets and category growth to gain 2.8 points of market share. Convenience stores account for the largest share of sales in 2012 with 37% of total U.S. sales (see Figure 8). Convenience stores and other retailers, such as dollar stores, saw more than 10% growth in both 2010 and 2011. Keeping small- format, grab-and-go products available for sales in these distribution channels will be important to future sales growth (Mintel, 2012) Supermarket sales of sports drinks have suffered from a middle ground syndrome because they are less convenient than convenience stores and have higher prices than mass merchandisers or club stores, such as Costco Wholesale and Sam’s Club. Supermarkets often resort to extreme discounting on sports drinks in order to drive volume sales. This price promotion is important to help curb future losses, but another important strategy will be attempting to mimic the convenience of other outlets by keeping refrigerated products available in store aisles and at checkout stands (Mintel, 2012) Figure 6: Total U.S. Retail Sales of Sports Drinks, by Segment, 2007-2017 Figure 7: Total U.S. Retail Sales of Sports Drinks, by channel, at current prices, 2007-12 Drugstore sales of sports drinks grew by 18% from 2007- 2012 with slow but steady increases every year, except 2009. With an emphasis on healthy eating, drug stores such as Walgreens position diet and natural sport drinks near fresh salads and sandwiches, offering a healthy pairing (Mintel, 2012) Convenience store sales of sports drinks grew by 32% from 2007-2012 and rebounded with double-digit growth in 2010-2011 after falling in 2009. A general interest in convenience, as well as the popularity of this channel among young consumers, explains the rise of convenience store sales. Sales through retailers other than supermarkets, drug stores, and convenience stores grew by 30% from 2007-2012 as consumers looked for discounts through dollar and club stores (Mintel, 2012). Based on the product life cycle stage of sports drinks, Powerade sales are forecasted to grow through 2017 and convenience stores will remain an important distribution channel due to consumer’s need for convenience and grab-and-go products. Figure 8: Total U.S. Sales of Sports Drinks, by channel, at current prices, 2010-2012
  7. 7. COMPETITIVE ANALYSIS Powerade is one of the two main competitors in the sports drink market, which is in the larger category of functional drinks. Also under the functional beverages category are energy drinks and nutraceutical drinks—drinks that have some added health benefit. There is a vast amount of diversity in terms of the products within the overall category, largely based on the type of functional additives used. The end consumer is thus presented with a range of products offering similar nutritional content, which means that for Powerade, there are a great deal of potential substitutes within the functional drink category alone. Such a high need to differentiate among the products in this category also decreases the prices of the products and forces players to spend more money on advertising (MarketLine, 2011). The functional drinks market in the United States is concentrated; 67.7% of the market’s total volume of sales comes from just the top three brands. However, there is an opportunity for new entrants as long as the company is large enough to obtain economies of scale in production and is able to invest heavily in brand building strategies (MarketLine, 2011). PepsiCo is Powerade’s most direct competitor, leading the sports drink market with the Quaker Oats Company’s Gatorade, which has 76% market share and $1.3 billion in sales in 2011. Coca- Cola’s Powerade follows with 23% share of the United States sports drink market and $393 million in sales (MarketResearch, 2011). However, new launches from these two existing brands seem to result in cannibalism rather than adding sales volume. Of the leading 20 sports drinks brands in the United States, 11 are product line extensions of Gatorade, and 6 are extensions of Powerade. All Sport is the only other sports drink brand accounted for, along with private label brands. Compared to Gatorade, Powerade products are priced lower overall (GMID, 2010). Gatorade’s G Series Perform is the top selling product line in the category with Powerade’s ION4 following well behind (see Figure 9). However, in 2011, a 28% growth rate was reported for Powerade as opposed to Gatorade’s 6% growth rate (MarketResearch, 2011). Because Gatorade and Powerade are the only primary competitors in the sports drink category and have an immense level of marketing muscle, there is limited attempt to enter this market. Gatorade is the category’s largest marketer and has long had an edge in the form of large professional athletic organizations such as NASCAR, the National Football League, and Major League Baseball. Powerade has been working to acquire endorsements in recent years and has worked with organizations like the NCAA and the PGA Tour. Powerade was also previously the official sports drink of the U.S. Olympic Team. Powerade’s edge mainly comes from its star athlete endorsements. In previous years, Coca-Cola’s spending on celebrity-centric marketing for Powerade has effectively helped the company to steal a portion of Gatorade’s brand share. Heavy marketing of sports drinks has paid off with high U.S. usage rates overall (Euromonitor International, 2010). Recently, due to the increasingly health-conscious consumers in the United States, coconut waters pose distinctive competition for Powerade. These beverages provide a natural alternative to sports drinks from the three leading U.S. brands of Zico, Vita Coco, and ONE. Other competition for Powerade comes from energy drinks, nutraceutical drinks or “functional water,” and bottled water. Additional indirect competition comes from fruit and vegetable juices, soft drinks, concentrates or powdered drinks, and ready-to-drink (RTD) tea (MarketLine, 2011). Figure 9: Leading 20 Sports Drink Brands in the U.S. in 2011, Based on Sales (in Million U.S. Dollars)   Million  U.S.  dollars   United  States;  Symphony  IRI  Group   Source:  Beverage  World   Figure 10: U.S. Functional Drinks Market Category Segmentation: % Share, by Value, 2010
  8. 8. In 2010, energy drink sales proved to be the highest in the U.S. functional drinks market, generating total revenues of $17 billion, which is equivalent to an 83.2% share of the functional drink category (see Figure 10). In comparison, the sports drink market reported total revenues of $2.3 billion and only 11.3% share of the functional drink category, while nutraceutical drinks follow behind sports drinks with 5.5% share of the category (MarketLine, 2011). Red Bull leads the energy drink category with about $2.6 billion in worldwide sales in 2011. Behind Red Bull are Monster Energy and Rockstar with $1.3 billion and $472 million in 2011 sales respectively. 5-Hour Energy dominates the related energy shot category with $928 million in sales in 2011 (Statista, 2011). Functional water beverages present lighter alternatives to products in the energy or sports beverage segments, even though they may contain some similar ingredients. Although less successful than Gatorade and Powerade in terms of sales, Coca-Cola’s Glaceau Vitaminwater is the best selling functional water brand in the U.S. with $291.5 million in sales in 2010, followed by the company’s Glaceau Smartwater with $114.6 million. PepsiCo’s SoBe Lifewater and Propel brands also generated significant sales, with $157.7 million and $112.2 million in 2012 respectively (MarketResearch, 2011). In this sense, Coca-Cola’s Powerade and functional waters compete against each other, potentially resulting in cannibalism. With its nourishing, meal substitution capabilities, the growing trend of fresh juice and smoothie drinks in the fruit and vegetable juice category poses indirect competition to Powerade. Naked Juice, Bolthouse Farms, and Odwalla are the top three brands in the United States, generating $112.5 million, $65 million, and $39.2 million in 2010 sales respectively (MarketResearch, 2011). Additionally, the RTD tea category contains a number of potential substitutes for Powerade for those who do not drink Powerade in an athletic-related situation. In 2010, the Pepsi Lipton Tea Partnership generated $412.6 million in sales and Arizona teas generated $402 million, both of which are higher than Powerade’s sales. Snapple products reported $227.3 million in sales (MarketResearch, 2011). Potential indirect competition for Powerade also comes from the carbonated soft drink category, whose total revenue reached $75.2 billion in the United States in 2012, according to Beverage Digest. As with their functional water products, Coca-Cola’s carbonated soft drink brands—which dominate the category—threaten cannibalism for the company when competing against Powerade. Finally, sports drinks like Powerade face direct competition from still bottled water brands, as water is often the primary form of hydration in situations involving physical activity. Encouraging consumers to replace water with sports drinks can pose an immense challenge. Private label brands alone accounted for $1.03 billion in sales in 2012. $690 million in sales came from Aquafina, $660 million from Dasani, and $4 million from Poland Spring (Statista, 2011). Powerade faces a moderate amount of both direct and indirect competition from various beverage categories. Notable competition comes from the energy drink market, as it is also part of the functional drink category and has a history of significantly higher sales than the sports drink market. However, as Powerade’s primary competitor, Gatorade has, and will continue, to pose a threat to Powerade’s growth. Along with its dominance of the sports drink category—which is almost entirely made up of just Gatorade and Powerade—Gatorade has the advantage of tremendous brand loyalty and the trust of consumers. While there is no lack of familiarity with the Powerade brand, Powerade has struggled to differentiate itself and overcome its competitor’s well-established brand equity. CONSUMER INSIGHTS We sent an 11-question online Qualtrics survey to individuals via social media and email. Additionally, we recruited 10 University of Michigan students to partake in an hour-long focus group. Four of the participants were members of collegiate sports teams while the other six were not. The following is a summary of the key consumer insights from both the survey and focus group. Of the 124 people who responded to the online survey, 35% were male and 65% were female. Additionally, 88.5% of respondents were between 18 and 22 years old. Twenty-eight percent of the respondents indicated that they were on a collegiate sports team, while 72% were not. Regarding participants’ amount of exercise, at least 88% of respondents exercise one day per week, and over 50% exercise between 2-5 times per week. Full results from the survey can be found in Appendix B. Respondents were then asked a series of questions about their opinions of sports drinks as well as their consumption habits. For example, when asked if they only drink sports drinks while participating in athletic activities, 65% of individuals disagreed or strongly disagreed. Furthermore, when asked about the importance of certain factors when choosing a sports drink, taste was the most important factor and also had the lowest variance among responses compared to other factors. The second most important factor as indicated by respondents was nutritional value. About half of the participants (48%) report that they buy sports drinks in supermarkets (such as Kroger or Meijer) or convenience stores (such as 7/Eleven). Sixteen percent responded that they do not purchase sport drinks at all. We then asked participants to rank their feelings about Powerade and a select few of its direct competitors, including Propel, Gatorade, Vitamin Water, and SoBe Life Water. On a scale of 1-5 (terrible-superior), Gatorade had a mean ranking of 4.0 while Powerade and Vitamin Water had mean rankings of 3.2 and 3.6 respectively. Although Vitamin Water had higher mean ranking than Powerade, Powerade had a lower variance among responses, signifying a more consistent rating of the brand across consumers. Next, respondents were asked to indicate their opinions of Powerade in isolation followed by its direct competitor, Gatorade, on several characteristics: trendiness, taste, replenishment, nutrition, flavor variety, and price. Participants were asked to rank Powerade and Gatorade on a sliding scale from 0-100 for each of these characteristics. Overall, trendiness, taste, and replenishment produced noteworthy results. When asked to rank Powerade and Gatorade on trendiness (0: uncool - 100: very trendy), respondents gave Powerade an average ranking of 44.9 whereas Gatorade received a significantly higher average rating of 71.7. Using a similar scale for taste (0: tastes terrible - 100: tastes great), subjects gave Powerade an average ranking of 60 and Gatorade an average ranking of 76.4. Finally, survey results suggest that Gatorade has higher replenishing ability than Powerade, with average rankings of 73.8 and 60.7 respectively on a scale of 0-100 (0: dehydrating - 100: very replenishing). Lastly, participants were asked to provide general evaluations of Powerade. First they were asked to share their opinion of the nutritional value of Powerade for an active body. Very few participants had strong opinions of Powerade’s nutritional value, as 51% participants “neither agreed nor disagreed” that Powerade offers the correct amount of nutrients for an active body. Additionally, responding to the statement, “I like Powerade better than other sports drinks,” 66% of survey participants disagreed or strongly disagreed.
  9. 9. 6 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Widely distributed Existing athletic endorsements/sponsorships Attached to widely recognized Coca-Cola brand International presence Unique nutritional forumal; four electrolytes Holds a small fraction of sports drink category ~23% compared to category leader of ~76% Weak online presence Low advertising recall Lack of positive brand associations No recognizable athletes in current advertising Poor awareness of nutritional benefits among consumers Environmental trend in online marketing Increase online presence & social media activity to reach young adult/teen demographic Emphasize formula’s nutritional value to differentiate brand Increase brand recognition with improved logo & slogan New athletes endorsements (U.S. athletes) Capitalize on increasing health and wellness trends Fierce competition from category leader High brand loyalty to category leader Lower brand equity could lead to difficulty in securing athlete endorsements Increasing competition could lead to price wars In addition to these survey results, our focus group provided valuable consumer insights. The focus group began with a blind taste test comparing Powerade and Gatorade across three similar flavors (Gatorade Cool Blue vs. Powerade Mountain Berry Blast; Gatorade Lemon-Lime vs. Powerade Lemon-Lime; Gatorade Raspberry Lemonade vs. Powerade Strawberry Lemonade). Participants were equally divided in their taste preferences toward Gatorade and Powerade among the Cool Blue and Berry Blast and Lemon-Lime flavors. Half of the participants preferred the Strawberry Lemonade Powerade flavor and 20% preferred the Raspberry Lemonade Gatorade, while 30% of participants did not select either flavor. Refer to Appendix C for complete taste test results. The guided discussion that followed revealed that of the participants who do not drink sports drinks, the primary reasons included their perception that they are artificial and “sugary.” One participant placed sports drinks in the same category as both soft drinks and artificial fruit juices. However, those that do drink sports drinks noted benefits that they believe result from drinking a sports drink. All participants’ responses were centered around the common ideas of hydration, energy, replenishment, and providing electrolytes. Two athletes noted that drinking a sports drink gives them a slight mental boost compared to water, while non-athlete participants noted more physical benefits, such as the belief that sports drinks help the body recover faster, replenish the body better than water, and provide people with more energy. Additionally, even though Powerade products in fact have more electrolytes than Gatorade products, focus group participants believed that Gatorade contained greater electrolyte content. Participants believed that this consumer misunderstanding is primarily due to the marketing efforts of Gatorade and Powerade. Regardless, a few focus group members voiced their belief that the benefits of electrolytes are “over-hyped.” When asked to associate words with the Gatorade brand, subjects responded with: “champion,” “success,” and “number one.” Conversely, for the Powerade brand, word associations included “lame,” “inferior,” “second-tier,” “underdog,” “weak,” and “delicious.” Participants were also asked to describe the typical Gatorade and Powerade consumer. Many agreed that the typical Gatorade drinker is a “first-tier athlete,” a “champion,” or a consumer who is concerned with brand image. Focus group subjects described the typical Powerade consumer as a “second-tier athlete” or even an “elementary-aged athlete” whose mother makes the purchase decisions for them. Notably, one participant mentioned that they might perceive a person drinking Powerade as more unique than a Gatorade consumer. Most participants were more likely to choose Gatorade instead of Powerade due to familiarity from the extensive and prolonged marketing efforts of Gatorade. Participants indicated that their familiarity with Gatorade leads to deeper trust of the brand and products. Further, participants had difficulty recalling specific Powerade marketing examples but were able to describe various Gatorade television advertisements, print advertisements, sponsorships, and branded sporting goods (e.g., water bottles and jugs) in detail. Overall, our focus group members made it evident that Gatorade is far more visible and thus has greater recognition and brand loyalty than Powerade. Complete focus group findings can be found in Appendix C. Based on the results of both the online survey and focus group, we have determined that we will be targeting our efforts towards American males and females between the ages of 13-24. Through our marketing communications, we hope to increase current sales, and thus market share, as well as enhance the associations between the Powerade brand and its superior nutritional benefits in the form of more electrolytes.
  10. 10. OBJECTIVES We will increase Powerade’s market share in the sports drink category by 7% among our target consumers of Americans ages 13-24 from February 1, 2014 to February 1, 2015. 1. We will increase the Powerade brand association as the most nutritional sports drink (i.e., greater electrolyte content) by 18% among Americans ages 13-24 from February 1, 2014 to February 1, 2015. 2. POSITIONING STATEMENT With its unique ION4 formula, we are positioning Powerade as the more powerful and nutritious sports drink for a generation of young, determined individuals who desire a competitive edge in every aspect of life.
  11. 11. MARKETING COMMUNICATION STRATEGY CREATIVE STRATEGY: POWER 4WARD We believe the solution to reinventing the Powerade brand is to POWER 4WARD. The “Power 4ward” campaign embodies the strength, passion, and determination that lies within the hearts and minds of all athletes and young people looking to accomplish their goals. The true power behind our product exists in its 4 electrolytes--sodium, potassium, calcium, and magnesium--which give Powerade drinkers the energy to keep moving forward. Our objective with this campaign is to position Powerade as the superior sports drink by highlighting the four electrolytes unique to its formula, as well as creating a strong and relatable brand image that speaks personally to our target audience and thus enhances brand loyalty. Based on the consumer insights we gathered, we found that sports drink users believe Powerade to be inferior to its competitor, Gatorade, for a two reasons: 1) the formula is not as nutritious as Gatorade, and 2) the advertising behind the Powerade brand is not memorable. With these findings it became clear that the Powerade brand needs to capitalize on the four electrolytes that make up its unique formula--something that our competitors lack. Integrating this unique selling point into our slogan and campaign will not only dispel consumers’ negative beliefs about the product, but also accomplish our goal of creating a memorable and relatable brand image.
  12. 12. (17) swimmer, high-school student, and 4-time Olympic gold medalist (17) gymnast, high-school student, and 2012 U.S. Olympic superstar (24) diver, college student, and Olympic gold medalist MISSY FRANKLIN GABBY DOUGLAS DAVID BOUDIA Ca MgNa K POWERADE presents... FINDTHE TH To create resonance with the all-important number 4, a new logo and bottle label design have been created (see Appendix D), which along with the “Power 4ward” slogan, will carry across all platforms of Powerade’s advertising. To headline Powerade’s new television commercials, social media campaign, sponsorships and special events, we will hold a year-long, nationwide contest entitled “Find the 4th.” The concept behind the entire campaign is to have three professional, young athletes act as spokespeople for Powerade, each personifying one of the four electrolytes in the Powerade formula. The other aspect of the campaign will be a competition to find a passionate, young, amateur athlete to join our Powerade athletes as the fourth electrolyte. We have chosen to use three well-known U.S. Olympic athletes throughout our entire campaign. These athletes fall into our target age range and embody the spirit and determination behind the “Power 4ward” campaign: Missy Franklin (17), swimmer, high school student, and four-time Olympic gold medalist, Gabrielle Douglas (17), gymnast, high school student, and member of the Fab Five 2012 U.S. Women’s Gymnastic team, and David Boudia (24), diver, college student, and Olympic gold medalist. These Olympians will also help to build awareness and buzz surrounding Powerade’s sponsorship of the 2016 Brazil Olympics, which is beyond the scope of this campaign. Most importantly, by using the Olympians in our advertisements, we are giving each electrolyte a human persona, which will make the Powerade product more relatable to our target audience, as well as entice them to engage in the contest and purchase Powerade products. We are confident that by using the “Power 4ward” slogan across all Powerade advertising, including the “Find the 4th” contest, we will successfully differentiate Powerade from its competitors, as well as create a lasting impression on our target audience, encouraging them to always “Power 4ward.”
  13. 13. TARGET MARKET The “Power 4ward” campaign will target young, driven individuals with a range of athletic ability. Whether our consumer is the star athlete on her high school’s track team who dreams of making it to the Olympics, or a college student who enjoys de-stressing with his buddies on the soccer field, we want Powerade to speak to young people--both males and females--who are passionate and driven to improve themselves and their performance. They look up to other young athletes who have made it professionally in their sport and find them to be an inspiration for their own success. Because of this, we would like our target consumers to associate Powerade and each of its four ions with our Olympic athletes in order to more personally relate to our four-electrolyte concept and understand how it could impact their own lives. By featuring these notable young Olympians as the representatives for our campaign, and showing them not only at the big games, but throughout their everyday lives, we are offering a direct opportunity for our target audience to identify with the Powerade brand. Our ideal consumer, Peter, is a 17-year-old high-school basketball player. Peter has always been a determined athlete and now he is striving to make team captain for his senior year. Though Peter has no plans of making it as a professional basketball player, he looks up to many collegiate athletes and young Olympians for their talent and drive. Powerade helps replenish his body and keeps him focued so he can accomplish his goals on an off the court.
  14. 14. MEDIA STRATEGY Through our yearlong “Power 4ward” campaign, we hope that our target audience of males and females ages 13-24 will have stronger brand associations of Powerade ION4 as providing the most replenishment of any sports drink due to its four distinct electrolytes. We hope to form and reinforce these linkages through our media strategy and tactics, which are designed to effectively speak to a younger target audience and seamlessly connect the “Power 4ward” message across all touch points. Ultimately, our campaign will encourage increased usage and sales, which will help us to steal share from our direct competitor, Gatorade, and achieve our marketing objective of increasing Powerade’s market share in the sports drink category. From our consumer insights, we determined that advertising through radio, print, or billboards would be largely ineffective for our target market. We will thus focus solely on the media most frequently used by our target consumers. Specifically, television spots will have the most creative impact and elicit positive reactions among our target through our use of admirable, recognizable celebrity athletes. By showing various aspects of our athletes’ day-to-day lives, a series of four 30-second spots will allow us to tell a series of relatable yet inspiring stories revolving around Powerade ION4 and the distinct benefits of each of its electrolytes. Advertising on a variety of channels and types of programming beyond solely sports-related television will help reach all of our young target consumers. The “Power 4ward” campaign will be strategically advertised through a media mix of... television, Internet, social media, special events, and sponsorships.
  15. 15. The camera pans across an unidentifiable girl swimming across her backyard pool. She gets out of the pool the camera reveals Missy Franklin’s face as she takes a long swig of red Powerade Ion4 and walks into the next scene: a jog to school. The narrative is in constant horizontal motion across the screen, the surroundings changing as Missy moves on to the next activity in her busy life. Missy leaves school, takes her dog for a jog in the park, replenishing along the way with her favorite flavor of Powerade. The camera continues panning into the next scene, as Missy finds her way into a limo, Powerade in hand, and arrives at a red carpet full of screaming fans. As she walks to exit the stage, the scene transitions to Missy walking towards an Olympic pool. Missy swims her way to first place, and the camera finally stops as she holds her gold medal. The screen goes black and “Powerade ION4” appears on the screen, followed by our “POWER 4WARD” slogan and P4 logo. Throughout the commercial there will be a voice-over of Missy discussing how Powerade, and specifically the properties of the electrolyte sodium help her in all aspects of her life. She’ll explain that out of Powerade’s four ions, the electrolyte sodium regulates the total amount of water in her body and helps the functioning of her brain and muscles so she can focus and perform her best. As the screen goes black at the end, she states, “I am sodium, one of the 4 ions of Powerade that helps me power forward.” Lastly, a deep male voice asks, “Do you have what it takes to be the 4th ION? Find out more at The commercial starts with no sound, a medium close-up frame on a diver preparing to make a big dive. The camera follows the diver in slow motion and as soon as he hits the water, time and sound return to the picture. He jumps out of the pool and the viewer can see it is Olympic diver David Boudia. As he cools off he takes a swig of blue Powerade. The scenes run seamlessly and he leaves the pool and is now in a living room full of college-aged guys. They are watching a big football game. The guys cheer on the team with snacks and Powerade distributed on the card table. David leaves the room and is suddenly on a date with his girlfriend, showing the young and playful side of David. Finally David returns to the pool, where he is practicing his dives. He nails a perfect double cross-over from the 10 meter platform and the screen goes black. “Powerade ION4” appears on the screen, followed by our “POWER 4WARD” slogan and P4 logo. As part of his voice-over, David says, “Out of the four ions in Powerade, the electrolyte potassium helps regulate my heartbeat and the function of my muscles. As a diver, my muscles need to be tight and my movements precise, but without Potassium, I could have weak muscles muscles and leg cramps...kind of like the first time I met my girlfriend.” As the screen goes black and “Powerade ION4” appears on the screen, David states, “I am Potassium, one of the 4 ions of Powerade that helps me power forward.” Lastly, a deep male voice asks, “Do you have what it takes to be the 4th ION? Find out more at facebook.com/powerade.” #FINDTHE4TH flashes on the black screen and the commercial is over. COMMERCIAL STORYBOARDS 1. “Missy Franklin as Sodium” 2. “David Boudia as Potassium”
  16. 16. A gymnast sprints toward the vault in a close-up frame, shot from the side. The viewer cannot tell who the gymnast is, but when she sticks her landing the camera tilts up to show Gabby Douglas. As she steps off the platform she grabs a Powerade to replenish herself. With the scenes run seamlessly into each other, she is suddenly at a baseball game with her friends. The viewer can see she is a normal 16-year-old girl who just wants to have fun. She walks over to the next scene where she is doing a photoshoot with her Olympic medals. After the shoot she grabs her grape Powerade and walks into the next scene, which happens to be at the gym again. She takes another swig and puts the Powerade in her gym bag, right before running onto the floor to do a flawless routine. She lands a double Arabian and the screen goes black. The “Powerade ION4” appears on the screen, followed by our “POWER 4WARD” slogan and P4 logo. In her voice-over, Gabby explains that out of the four ions in Powerade, the electrolyte magnesium is responsible for reactions involving muscle function, energy production, and protein and carbohydrate metabolism. “Without it, I wouldn’t be able to produce energy, and my muscles would be in a constant state of contraction--not a good thing for the girl they call ‘Flying Squirrel’.” As the screen goes black and “Powerade Ion4” appears on the screen, Gabby states, “I am Magnesium, one of the 4 ions of Powerade that helps me power forward.” Lastly, a deep male voice asks, “Do you have what it takes to be the 4th ION? Find out more at facebook.com/powerade.” #FINDTHE4TH flashes on the black screen and the commercial is over. Depending on who our contest winner is, we will incorporate clips from their entry video intercut with scenes we film from their daily lives. Possible scenes will include our fourth electrolyte representative at school, practicing their sport , playing in a sporting event, and spending time with friends and family. Our last scene will be our winner meeting the other three Olympian spokespeople for the first time, providing continuity and closure to all four of our television commercials. Our calcium representative will say in his or her voice-over: “Everyone, including me, needs calcium. It helps transmit nerve impulses and forms strong bones-the foundation for any level of athlete. I am calcium, the fourth and final ion in Powerade.” The screen goes black and “Powerade ION4” appears on the screen. The fourth representative, in unison with Missy, David, and Gabby’s voices, states: “Together We Power Forward.” Our “POWER 4WARD” slogan and P4 logo flash on the screen, with the hashtag “FoundThe4th.” 3. “Gabby Douglas as Magnesium” “The 4th ION: Calcium”
  17. 17. Powerade-sponsored special events will bring the “Power 4ward” campaign to life. The “Find the 4th ” contest will help to put an even more relatable face to the Powerade ION4 brand while encouraging consumers to interact with Powerade regularly. Sponsoring additional special events like the NCAA Basketball Tournament, Under Armour High School All-American Game, Special Olympics, and Little League World Series will help Powerade give back to the community while keeping our efforts relevant to the brand. More in-depth information regarding these efforts can be found in the “Sales Promotion” section on page X. Our use of the Internet, including social media and Hulu advertising, is crucial to complement the traditional advertising we are using and to speak to a younger target audience that is highly active online. It is a cost-effective way to keep the Powerade ION4 brand relevant on an everyday basis and to give a voice to Powerade beyond what is seen on TV. Our social media sites are crucial to advertise our “Find the 4th” contest and to build buzz about the rest of our marketing efforts, as our consumer insights made it clear that most young people regularly utilize at least two social media sites. In terms of timing, our television advertising will follow a pulsing schedule, so that television commercials will continuously be shown during various programs, but with periods of heavier emphasis. For example, with regard to advertising during sports-related programming, we will constantly advertise on ESPN, but there will be heavier periods of advertising on other channels during March Madness and Sunday Night Football. Also, advertising on reality competition shows, for example, will only take place for the duration of these competitions. Thus, on each individual television channel, our advertising follows a flighting schedule. To complement this television advertising schedule, our social media efforts will follow a continuous schedule so that the “Power 4ward” message is constantly being communicated to our target consumers. Given our emphasis on television and social media as our advertising media, our digital efforts will always be up-to-date and relevant. Lastly, because our young target audience is constantly watching television shows online, running our commercials on Hulu using a continuous schedule will also be a valuable advertising medium to invest in. MEDIA TACTICS Specifically, our television advertising will be aired during a variety of cable and network programs as well as sports broadcasts. The commercials will be spread amongst Fox, NBC, and ABC for our broadcast networks as well as cable networks such as ESPN, Comedy Central, FX, E! and AMC. Programs such as Fox’s Family Guy, FX’s Always Sunny in Philadelphia, and Comedy Central’s South Park should effectively reach a significant portion of males in our target market while NBC’s The Voice, E!’s E News, and Fox’s So You Think You Can Dance will reach a large portion of females. Advertisements aired during sports broadcasts will certainly reach our target consumers, albeit more males than females. Finally, we expect that our Hulu advertising will reach our target as a whole due to the wide range of shows that can be viewed on the site based on personal taste. we believe these channels target a young, active, busy audience that aligns with the consumers we would like to associate with Powerade. Our social media efforts will be focused on Facebook, Twitter, and Instagram (see Digital section). Powerade’s Facebook page will be used mainly for the “Find the 4th” sales promotion, and the actual voting for the contest will take place on Facebook as well. Twitter and Instagram will be used to support the contest as well as reinforce our television advertising, special events, and sponsorships. For more in-depth information on these platforms, see the “Digital” section on page X.
  18. 18. Through the use of strategic television channels and social media platforms, we are heavily emphasizing the frequency of our advertising. While reach is still a significant factor in our campaign, our target group of people ages 13-24 is specific enough that it is logical to concentrate immensely on enhancing our message among the group we do reach by increasing the amount of times and ways they come into contact with the Powerade brand. Because of this, our objective in terms of reach and frequency is to reach 40% of our target, males and females ages 13-24, two or more times each week during the 12 months of the “Power 4ward” campaign. We anticipate the high costs of network television advertising, but believe that our commercials will be worth the average cost of approximately $110,000 per 30-second spot. Being that the broadcast networks we are advertising on include Fox and NBC, it is our hope that the lower average cost of running a commercial on NBC, with the exception of Sunday Night Football, will offset the fact that Fox has consistently charged the highest average rate per ad (Crupi, 2012). In sum, our television advertising, although inherently expensive, will be the best way to achieve our reach objective—especially during prime time. Running our commercials on Hulu— which boasts tens of millions of unique visitors on a regular basis—for $45 CPM for a video commercial (Hulu. com, 2013) will help us to capitalize on our television ads while contributing to our frequency objective. It is our hope that by coming into contact with the brand multiple times each week both on TV and online, our target will not only associate Power ION4 with the concept of four electrolytes and the power that comes from them, but that they will most importantly be able to personally identify with the brand. Media Flow Chart
  19. 19. DIGITAL Thus far, Powerade has made sufficient digital marketing efforts. They have active Facebook, Twitter, and Instagram pages, but there is room for improvement in terms of the number of followers, user engagement and appearance of content. Overall, we would like each of these social media sites to better exploit Powerade’s partnerships with athletes like LeBron James and Derrick Rose as well as our Olympian additions of Missy Franklin, David Boudia, and Gabby Douglas. We also aim to be more consistent across platforms and to reinforce our new campaign slogan and hashtag, #POWER4WARD, as well as the new P4 logo. These methods will ensure that Powerade’s message is constantly being communicated in a relevant manner through these touch points, and also that Powerade’s target consumers are interacting with the brand. In addition to the social media networks, the Powerade website and blogs will be used to drive awareness to the promotion as well as continue to deepen consumers’ relationship with the brand. We will get popular bloggers, including sports bloggers, to write about the ION4 promotion to build awareness. These blog posts will drive consumers to the Powerade website, integrating our platforms and increasing web visibility. The current Powerade website is rather simplified and could be more engaging. Specifically, Powerade sponsors LeBron James and Derrick Rose endorse the brand, but those athletes are not a focus on the website. We will improve the website by including player profiles and quotes, demonstrating a relationship between the athletes and the brand. Further, we will add information about our three Olympic athletes to increase their visibility with the brand. Because Powerade’s Facebook page already has about 1.6 million ‘likes,’ it will be used as the primary vehicle for our “Find the 4th” contest, including users’ video submissions as well as posts encouraging people to vote by ‘liking’ their favorite video. As part of our sales promotion efforts, consumers who vote have the opportunity to win Powerade coupons, giving them incentive to visit our Facebook. Awareness will come through Powerade-sponsored posts on our target consumers’ news feeds. We will engage in conversations with consumers by posting current news or events that appeals to our young target as well as polls or brief, entertaining quizzes to encourage interaction. Our main objective is to bring new consumers to the Powerade Facebook page while also providing our existing users with a reason to keep returning to the page. Overall, these efforts should heavily increase the number of likes on our page to get closer to Gatorade’s 6 million likes. Providing a link to our Facebook page on Powerade’s website will enhance these efforts. FACEBOOK
  20. 20. TWITTER Twitter will be used to provide updates on the “Find the 4th” contest’s progress as well as any Powerade-sponsored events or current happenings. We will also tweet content that relates to the philosophy of the Powerade ION4 brand, but we will not limit ourselves to sports-related posts, as is the current norm. Instead, we will tweet about interesting pop culture updates relating to our target audience or impressive achievements by young people in individual communities. Because Powerade’s Twitter handle is currently fairly active, we aim to build upon this activity by obtaining Powerade-related tweets by our sponsored athletes. Finally, we will drive home our constantly active Twitter presence with an embedded stream of tweets on Powerade’s website as well as an embedded ‘Follow’ button. TWITTER INSTAGRAM Instagram has become the most popular social media application among our target consumers, and thus requires increased attention as a platform for positive brand marketing. Specifically, we expect that it will resonate most with our female consumers. Because it is visual in nature, Instagram will lend itself to reinforcing Powerade’s image as a young, hip, relatable brand. Powerade currently has an Instagram, but with only 13 photos and approximately 350 followers, compared to Gatorade’s 57,000. This provides a tremendous opportunity to reinvigorate our presence. Powerade’s Instagram will be used to post countless ‘memes’ that resemble print advertisements without the expensive cost, as well as real pictures of Powerade at events or personal pictures of Powerade’s athletes. Instagram will also provide a space for everyday users to share pictures of themselves using Powerade, helping to spur consumption through word of mouth. We can further increase the amount of photos posted through a sales promotion by encouraging users to put the hashtag #POWER4WARD on their personal Powerade photos in order to potentially win Powerade discounts and swag.
  21. 21. SALES PROMOTIONS Our main sales objective is to increase market share by expanding the Powerade consumer base to include a younger target group, and thus increase the amount of Powerade purchased overall. Our sales promotions will be focused on encouraging trials, as our consumer insights revealed that many are hesitant to switch from our competitors due to brand loyalties--the strongest of which lie with Gatorade. By providing incentives to our target consumers, we hope to see an increase in sales and as a result, conversion from the Gatorade brand to Powerade. More specifically, in our “Find the 4th” contest, the winner will be featured in our fourth TV advertisement, as well as receive Powerade apparel and accessories (see Appendix F). We will also provide coupons as a reward to those who vote for their favorite candidate in the contest, as seen in Appendix G. Those entering the competition will be encouraged to buy Powerade products to feature in their application videos, and those who vote will be more likely to buy Powerade due to the coupons they will obtain for participating. We also intend to sponsor the 2016 Summer Olympics and the NCAA Men’s Basketball Tournament to increase our appeal to retailers and provide samples and other branded giveaways to spectators. Additionally, to more closely identify with our consumers, we are sponsoring events like the Under Armour High School All- American Game, Special Olympics, and Little League World Series. Finally, to encourage our customers to become loyal consumers, we plan to promote our current Powerade Rewards program more heavily. OBJECTIVES & STRATEGY Our main sales promotions will involve the “Find the 4th” contest. We will be looking for an undiscovered young athlete to feature in our advertisements and represent the fourth electrolyte in Powerade’s formula. Those who are interested will submit a video of their athletic skills and aspirations, incorporating Powerade as well. We will choose five finalists and ask America to vote for their favorite on Powerade’s Facebook. As an incentive to participate in the selection of our winner, voters will be asked to provide their email address in order to receive regular Powerade coupons for the next six months. The coupons will not only encourage our target audience to vote, but also drive traffic to our website and increase the chances that Powerade is purchased by the coupon receivers. The winner of the “Find the 4th” contest will be featured alongside Powerade’s Olympic athletes in our advertising, win Powerade branded gear, and receive a year-long supply of Powerade sports drinks. We also intend to continue with the currently existing Powerade Rewards program. With every purchase of Powerade or other participating products, consumers can earn points towards various rewards, such as an iPod or Nike gift card. We plan to advertise this promotion through our social media accounts to drive awareness and encourage people to sign up on our website to become active rewards members. Members can also donate their points to various causes or to young athletes in need. Another sales promotion will be our sponsorship of the 2014 NCAA Men’s Basketball Tournament. Powerade signage will be clearly visible on the courts and surrounding areas, and spectators will be offered free samples of Powerade and branded giveaways. We will also provide the drink at concession stands near our designated sampling areas to encourage instant purchases. The competing athletes will be given free Powerade branded refillable water bottles to use throughout the competition. We plan to pursue similar event sponsorship tactics during the 2016 Summer Olympics, although this is not within the scope of our campaign. Lastly, our partnership with the Under Armour High School All-American Game and Little League World Series will include Powerade signage, Powerade-branded sports equipment, unlimited Powerade for all players, Powerade water jugs and water bottles, and Powerade stands for spectators. TACTICS
  22. 22. RATIONALE OTHER MARCOMMS PUBLIC RELATIONS Our main public relations efforts will involve creating buzz surrounding Powerade by sponsoring events and demonstrating cause-related marketing strategies. Events include the Summer 2016 Olympics, Special Olympics, Under Armour High School All-American Game, Little League World Series, and NCAA Final Four tournament. Media alerts and press releases will be distributed in a timely fashion (see Appendices H and I), and a press conference with the ION4 athletes will be broadcast closer to 2016. Press releases will cover a variety of topics including: the 3 ION olympic athletes, (i.e. Gabrielle Douglas, David Boudia, and Missy Franklin); the “Find the 4th” contest; as well as news of the contest winner. Further press releases will cover cause-related marketing strategies discussed below. Our main cause-related marketing strategy will be to support low-income schools’ athletic departments and provide Powerade at their games and practices. Sponsored sports include soccer, basketball, football and track for both girls and boys teams, freshmen through seniors in high school. These will be filmed and pitched for PR purposes. At the championship games of each division, our Powerade ION4 athletes will be present to further show support for low-income schools. The objective is to increase awareness of Powerade’s cause- related initiatives and give consumers a reason to purchase Powerade products. Further, these strategies will build excitement around Powerade and exhibit a positive image of the brand. Along with the Summer 2016 Olympics, Powerade will sponsor the Special Olympics. During that time, 10% of Powerade sales will go toward funding the athletes’ physical therapy for their events. CAUSE-RELATED MARKETING The rationale behind our “Find the 4th” contest and event sponsorships is to raise awareness and excitement about the Powerade brand and to combat the perception that it is the “inferior” sports drink, as compared to its major competitor. We also hope to boost the Powerade reputation by ensuring that consumers link the brand to successful athletes such as our Olympic representatives. By providing branded items, we are aiming to increase recognition and familiarity with the brand among our target market. Our rationale behind distributing coupons is that they will encourage current consumers to purchase a greater amount of Powerade products while enticing non-users to try the brand. Similarly, we feel that providing Powerade samples at events will encourage those who otherwise would not buy the drink to try it. We believe that these samples will induce immediate sales due to their proximity to the beverage stands, which could then lead to repeat purchases in the future. Finally, we hope to retain our current consumers by promoting our rewards program, which allows consumers to either donate to a cause or win a variety of prizes.
  23. 23. BUDGET In 2012 Powerade had an annual marketing budget of $9,602,900. Almost the entire budget, 99.2% of it, went to network and cable TV advertising spots. For the year 2014 we will request $12,483,770, which is 30% more than the 2012 marketing budget. To arrive at this number using the percentage of sales method, we took our marketing objective and calculated the amount our sales would have to increase in order to achieve our objective of a 7% increase in market share. Assuming the size of the overall sports drink market stays the same, Powerade will realize a 30% increase in overall sales if we reach our market share objective. Considering this 30% increase in Powerade’s sales, we are requesting the same percentage increase for the marketing budget. While our marketing budget will have a heavy TV focus, we will also allocate our marketing efforts to social media and events. Our social media budget will be $200,000 which corresponds to 1.60% of our overall budget. These funds will be used to manage the Facebook, Twitter, and Instagram accounts as well as cover the costs of the online coupons and giveaways. In terms of our events budget, we will allocate $4,626,862, or 37.06%, of our total budget to these efforts. Much of our events budget will go towards the amount it costs us to sponsor three famous Olympic athletes. Additionally, the events budget will cover the costs of the travel, food, and hotel expenses of the Olympic athletes for the duration we are using them to film commercials as well as participate in other promotional events. When Powerade is promoting cause-related efforts, the events aspect of the budget will cover the costs of the Powerade product donations, apparel, and other promotional items, along with Powerade representative travel expenses. The largest part of our budget will be spent on television advertising to launch and sustain Powerade’s 2014-2015 campaign. Due primarily to the high costs of network television advertising, we will spend $7,656,908, or approximately 61.34%, of our budget on TV advertising. The Powerade commercials will be aired on network, cable, and sports television stations. Network advertising costs will equal $4,242,346, cable costs will equal $264,000, and sport stations will equal $3,150,562. For a summary of our budget, refer to Appendix J. Budget Distribution
  24. 24. CAMPAIGN EVALUATION We are confident in the ability of the new “Power 4ward” campaign to meet our marketing and communications objectives, but ensuring the measurable success of the campaign is of the utmost importance. We will use both concurrent testing and post-testing to evaluate the effectiveness of our “Power 4ward” campaign in increasing Powerade’s market share in the sports drink category as well as enhancing the brand associations our target consumers have with Powerade as being the more powerful sports drink with the highest electrolyte content. Our marketing objective is to increase Powerade’s market share by 7% among Americans ages 13- 24 by the end of our 12-month campaign. In order to evaluate increased market share, we determined the percentage increase in sales that we are looking for (30%). We will use tracking studies to determine the amount of Powerade sales we have experienced after the first six months of our campaign as compared to sales in the previous year, along with the nature of these sales. After the campaign has finished, we will use post-testing to determine the exact percentage increase in sales and thus the overall increase in market share to determine if we achieved our marketing objective. We will also evaluate our advertising message through tracking studies and post-testing. While our television advertising is running, we want to ensure that it is getting the job done. Thus, using phone interviews, we will measure attitudes toward the Powerade brand among our target audience as well as communication playback to determine whether or not we are getting our “Power 4ward” message across properly. Finally, at the 12 month point, we will conduct surveys to measure whether or not we have succeeded in improving our target consumers’ brand associations with Powerade as being the more nutritional sports drink. Because the digital aspect of our campaign is crucial in reaching our young target audience, we plan to evaluate the effectiveness of Facebook, Twitter, and Instagram in supporting the “Power 4ward” message. We will measure interactivity and engagement before the campaign as well as after the 12 months have concluded. Throughout the campaign, we will be generating conversations with users in real-time via digital channels. We plan to track the success of our public relations efforts throughout the campaign as necessary. After distributing pitches, press releases, or media alerts, we will keep track of media coverage by generating wrap- up reports for each specific initiative. We will also keep track of media attendance at our special events. We will pay special attention to media coverage and attendance at our cause-related events to ensure that the public is made aware of them. However, success of our cause-related marketing strategies will also be evaluated based on how many consumers purchased Powerade to contribute to the cause, the total amount of money raised for each event, event attendance, and social media engagement surrounding the cause. After the campaign has finished, measuring our target consumers’ impressions of the Powerade brand as compared to their perceptions at the inception of the campaign will provide insights into whether or not our PR efforts—and our philanthropic efforts—were effective. Lastly, to evaluate the effectiveness of our sales promotions, we will measure how many people entered and voted in our “Find the 4th” contest. We will also track attendance at our other special events as well as track the number of coupons we award to consumers. Finally, we will measure participation in the Powerade Rewards program in terms of how many people sign up for the program and how many redeem their points. Measure brand association link to highest electrolyte sports drink Digital effectiveness is crucial to reaching target audience Utilize tracking studies to measure market share changes
  25. 25. REFERENCES Crupi, Anthony. “Broadcast Spot Pricing Continues to Creep Up.” AdWeek. N.p., n.d. Web. 01 Apr. 2013. <http://www.adweek.com/news/advertising-branding/broadcast-spot-pricing-continues-creep-138106>. Functional and Natural Ready-to-Drink Beverages in the U.S. May 2011, Packaged Facts. Web. 25 Feb. 2013. Functional Drinks in the United States. Rep. N.p.: MarketLine, 2011. MarketLine. Web. 25 Feb. 2013. Global Functional Drinks Opportunities. Rep. N.p.: Passport, 2010. Euromonitor International. Web. 19 April. 2013. Google Images. N.p., n.d. Web. 01 Apr. 2013. <http://images.google.com/>. “How Many Users Does Hulu Online Video Streaming Have?” www.zap2it.com. Zap2It, n.d. Web. 19 Mar. 2013. “Hulu Ad Sales”, CTools Marketing 407 class site, Web. 14 Mar. 2013. “Hulu Advertising.” Hulu Advertising. N.p., n.d. Web. 01 Apr. 2013. <http://www.hulu.com/advertising>. “In Their Prime: Broadcast Spot Costs Soar; Gap between network and cable CPMs remains vast,” Adweek. N.p., n.d. Web. 16 Feb. 2013. <http://www.adweek.com/news/television/their-prime-broadcastspot-costs-soar-132805>. Sports and Energy Drinks in the U.S. Rep. N.p.: Passport, 2012. Euromonitor International. Web. 25 Feb. 2013. Steinburg, Adam. “TV Ad Prices: ‘Idol’ No Match for Football,” Advertising Age. N.p., n.d. Web. 18 Feb. 2013. <http://adage.com/article/media/tv-ad-prices-idol-match-football/237874/>. Marigny Research Group, Inc. Functional and Natural Ready-to-Drink Beverages in the U.S. Rep. Rockville: Packaged Facts, 2011. MarketResearch. Web. 25 Feb. 2013. Nonalcoholic Beverages and Soft Drinks in the United States. N.p.: Statista Dossier, 2012. Statista. Web. 25 Feb. 2013 “PACKAGING PROFILE: COCA-COLA.” Euromonitor. GMID Passport, 24 Jan. 2012. Web. 4 Feb. 2013. Performance Food and Drink – US – January 2013, Mintel. Web. 25 Feb. 2013. Sports Drinks – US – September 2012, Mintel. Web. 25 Feb. 2013. POWERADE. N.p., 2013. Web. 01 Mar. 2013. <http://www.us.powerade.com/>. “POWERADE ION4.” Facebook. N.p., 2013. Web. 20 Apr. 2013. <https://www.facebook.com/POWERADEION4?fref=ts>. The Coca-Cola Company. Rep. N.p.: MarketLine, 2012. MarketLine. Web. 25 Feb. 2013. “Thirst Quenchers and Imported Beer Are Favorites among Hispanic Beverage Consumers, Reports Mintel.” PR Newswire. PR Newswire, 18 July 2012. Web. 25 Feb. 2013. United States-Functional Drinks. Rep. N.p.: MarketLine, 2011. MarketLine. Web. 25 Feb. 2013. .
  26. 26. A. CURRENT PRODUCT LINE ZERO Mixed Berry ZERO Grape ZERO Lemon Lime ZERO Orange ZERO Fruit Punch ZERO Strawberry Mountain Berry Blas t Orange Fruit Punch Grape Lemon-Lime Melon White Cherry Strawberry Lemonade ADVANCED ELECTROLYTE SYSTEMThe helps to replenish the body with four electrolytes lost in sweat . The forumla ialso contains a 6% carbohydrate solution to help provide energy to working muscles, along with Vitamins B3, B6, and B12. SODIUM POTASSIUM MAGNESIUM CALCIUM FLAVORS: APPENDIX A. B. C. D. E. F. G. H. I. CURRENT PRODUCT LINE QUALTRICS SURVEY FOCUS GROUP- QUESTIONS & RESPONSES VISUAL BRADNING & PACKAGING APPAREL & ACCESSORIES COUPON MEDIA ALERT PRESS RELEASE BUDGET
  27. 27. B. QUALTRICS SURVEY QUESTION 1: Please specify your gender. QUESTION 2: What is your age? QUESTION 4: How often do you exercise on average? QUESTION 5: Please indicate the extent to which you agree with the following statements: QUESTION 3: Are you or were you ever on a collegiate sports team (including club sports)? QUESTION 6: How important to you are the following factors when choosing a sports drink? (1-no importance, 3-neutral, 5-high importance) QUESTION 7: Please indicate how much you like the following beverage brands (1-terrible, 3-neutral, 5-superior) QUESTION 8: When you buy sports drinks, where do you usually purchase them? QUESTION 9: Please indicate your feelings about the sports drink Powerade. QUESTION 10: Please indicate your feelings about the sports drink Gatorade. QUESTION 11: Please indicate the extent to which you agree with the following statements:
  28. 28. C. FOCUS GROUP- QUESTIONS & RESPONSES 1. Describe drink X and drink Y ( X-Gatorade, Y-Powerade ) · Y has flatter, more watered down taste than X · Y more acidic tasting · X a bit sweeter than Y · Y sweeter than X · X tastes like it has more sugar and sodium than Y 2. Why do you drink sports drinks? · Because I don’t drink soda, drinking a sports drink provides me with a sweet taste as opposed to water · When I’m sick with the flu · At football practices and games · At parties, mixed with alcohol · I would rather have Gatorade than water 3. If you don’t drink sports drinks, why don’t you drink them? · I drink excessive amounts of water only · I don’t drink juices or sodas · I do not want to consume the sugar or artificial ingredients in sports drinks · I hate drinking sports drinks during exercise/sports · If I’m not in a competitive atmosphere, there is no point in drinking a sports drink 4. What words come to mind when you think of Gatorade? · Champion · Success · Number 1 · Professional athlete · Best athletes 5. What words come to mind when you think of Powerade? · Lame · Inferior · Weak · Delicious · Second tier · Sugary · Underdog 6. Identify the type of person you would associate with drinking Powerade. · A second tier athlete or high school athlete · A health conscious person · Savvy shopper who knows it has more electrolytes than Gatorade · Someone who is loyal to the Coca-Cola brand · Elementary school athlete whose mom buys groceries for them · Someone more unique; not afraid of going against the grain 7. Identify the type of person you would associate with drinking Gatorade. · A champion · A first tier athlete · A brand conscious or image conscious person 8. What factors might you consider to be the most important when choosing a sports drink? · Brand name is most important; I just grab Gatorade · I strictly go by taste · Color 9. What benefits do you feel come from drinking a sports drink? · I think electrolytes are over hyped · I think Gatorade has more electrolytes than Powerade; better replenishes my body · When I drink a sports drink after exercising, I feel like my body is being replenished better than if I just drank water · If I’m feeling lethargic, I feel as though a sports drink gives me a boost · The sugar in sports drinks gives me an energy kick 10. Do you feel that a sports drink gives you the motivation you need to perform better? · Yes, in the sense that I think a sports drink helps me recover faster than water 11. Do you feel social pressure to use one brand of sports drink over another? · No · A function of Gatorade being so much more visible than Powerade 12. Can you recall any marketing for Powerade? · Could not recall a Powerade TV commercial · Powerade lightening bolt · Powerade sponsorships (athletes) · Sleeker bottle design than Gatorade; looks more athletic than Gatorade 13. Can you recall any Gatorade marketing? · Colored sweat drops in TV commercials · Gatorade baths; associatied with football players · The bold “G” has better recognition than the Powerade logo 14. What would make you switch from drinking Gatorade to drinking Powerade? · Advertising more electrolytes on the Powerade bottle · If Powerade had less sugar/calories than Gatorade · If Powerade did something that Gatorade wasn’t doing already · Making Powerade sponsorships more visible/known; cannot recall seeing Powerade at a sporting event · If Powerade endorsed sports teams; Gatorade has taken over sports · If Powerade were significantly cheaper than Gatorade · If I knew that Powerade was more nutritious, I would choose it, but I trust the Gatorade brand more