Business Cafe - Lucozade

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Ask your parents what they were given when they were ill and the answer will often be a dry bit of toast and a glass of Lucozade. Lucozade has been around since 1927, when a pharmacist in Newcastle …

Ask your parents what they were given when they were ill and the answer will often be a dry bit of toast and a glass of Lucozade. Lucozade has been around since 1927, when a pharmacist in Newcastle formulated the drink in order to help his children fight colds or the flu. What he designed was an easily digestible glucose drink that would enable his children to gain energy when they were too ill to want any food. By 1938, the brand was purchased by Beecham and began to be distributed nationwide. Soon, it became renowned as a reliable source of recovery

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  • 1. Lucozade Ask your parents what they were given when they were ill and the answer will often be a dry bit of toast and a glass of Lucozade. Lucozade has been around since 1927, when a pharmacist in Newcastle formulated the drink in order to help his children fight colds or the flu. What he designed was an easily digestible glucose drink that would enable his children to gain energy when they were too ill to want any food. By 1938, the brand was purchased by Beecham and began to be distributed nationwide. Soon, it became renowned as a reliable source of recovery The product saw its sales increase dramatically in the 1950’s and 1960’s. However, by the 1970’s, the sales of Lucozade were beginning to decline, as the population of the UK became more health conscious. The owners of Lucozade, Beecham, needed to reflect on how to inject life into the product. Its sales incorporated a large number of people but they only tended to have the drink when they were ill. It was the type of product that a household would keep in the cupboard for several months until someone was ill. Therefore, in 1982, there was a major repositioning of the brand – from a drink for the ill to a drink for the healthy. Throughout the 1980’s, a significant marketing campaign repositioned Lucozade within the market. The strapline of “Aids Recovery” was removed and “Replaces Lost Energy” took its place. In essence, the new market for © Copyright 2013 Tutor2u Limited Lucozade became those young, healthy individuals who were doing exercise and needed a drink to boost their energy levels. New flavours were introduced and the product was completely re-packaged. The marketing campaign also involved famous sports stars – most famously, the Gold medal winning Olympic Decathlete, Daly Thompson – who achieved a gold medal in the 1980 and 1984 Olympics and also held the world record for the event. In 1992, the company launched “Lucozade Sport” an isotonic drink designed to rehydrate an athlete during physical activity. Once again, there was the prominent use of leading sports stars in the advertising campaign, such as Rugby’s Jonny Wilkinson. tutor2u
  • 2. Lucozade continued By 2000, following two mergers, Lucozade was owned by the pharmaceutical company, GlaxoSmithKline (GSK), a leading market player, that employs 99,000 employees across 100 countries globally. Lucozade is a good example of Market Development – using the Ansoff Matrix model. The strategy of the business over recent decades has been to take the product and find new markets for it. a reported £1.35 billion. GSK took the decision to scale back its brands with a renewed focus on its Pharmaceutical products. Suntory already owns the drinks brand Orangina Schweppes. Ribena and Lucozade had sales of £500 million in 2012. The purchase of Ribena and Lucozade pre-empted a possible auction of the brands with private equity firms, such as Blackstone and Lion Capital, as well as Iru-Bru maker AG Barr all reported to be considering bids. The latest development in Lucozade’s history is that the business has been sold, along with Ribena, to a Japanese firm called Suntory, for © Copyright 2013 Tutor2u Limited tutor2u