Gatorade Competitive Advantage

Competitive Rivalry: Competitive rivalry is relatively high as seen in previous competitor analysis. There are many competitors in the local market and on the shelf within the mainstream markets.

After so many years of repetitive advertising, Gatorade is the name that comes to mind if someone thinks of energy drinks. Consumer visualizes it as a product that meets his goals of extra stamina, energy and efficiency. Some customers buy multi packs of products for value. Buying in bulk results in additional discounts for the customer that leads to continued association with the brand, where Gatorade is a conditioned stimulus and six-pack buying is a conditioned response.

Powerade and Gatorade are two very successful companies; in some ways, they?re alike and in other areas, they are very different. To compare and contrast these companies, we?re going to look at a television commercial advertising they?ve each produced. Each of these commercials involve basketball as their sporting backdrop, but more importantly, both commercials utilize the rhetorical triangle: Ethnos, Pathos, and Logic. These three things are used to persuade the audience.

The competition among rivals is very high due to price and non-price factors. Companies try to attract customers to their products by introducing

Gatorade has made its significant impact in the mass market, but they want to expand and solely focus on the sports nutrition market. Gatorade has dominance in the sports drink market and with consumers they weren’t specifically targeting such as a couch potato drinking it for regular consumption. The brand decided to re-image itself by changing the logo with the word Gatorade and a lightning bolt to a G with a lightning bolt. This changing took place in 2009. They did this rebranding because of the one percent decrease in sales volume. Changing the logo hurt the company even more because people did not recognize the brand causing for a 13 percent decrease. PepsiCo failed with rebranding Tropicana as well and went back to the original. They decided to stick with the new brand image of Gatorade.

Gatorades success with using athletic figures and role models to promote food and beverage products has paved the way for many other companies. Other companies since Gatorade have hired athletic spokesman to endorse products including the likes of PowerAde, Gatorades main competitor. PowerAde was actually only developed by Coca-Cola Co. for the sole purpose to compete with PepsiCo’s Gatorade. (Smenyak, 2011). By receiving great feedback from their communication plans, Gatorade has been able to grow and expand ideas.

Gatorade is a flagship brand of PepsiCo and has a commanding 75% market share of the sports nutrition beverage marketplace globally, being sold into 80 different countries according to the latest PepsiCo annual report published in late 2011. Gatorade's success in branding and product marketing has actually expanded the global market for sports nutrition beverages during the late 1990s and into the 21rst century. Recently however the company has faced many channels including product line extensions of the last decade which failed to deliver strong results (Pollack, 1997) and a more critical analysis of their ingredients as many of their beverages are sold in public schools (Tallon, 2009). Despite these challenges however, Gatorade continues to experience strong market share and growth. The intent of this analysis is to evaluate and provide recommendations for each of the four areas of the marketing mix including product, price, promotion and place or distribution.

The highest percentage of the company sale is as a result of making impulse purchases; hence this requires a good point of sale support team. The market is very competitive. There are a couple of competitors that offer the same products as Gatorade, for example, MW, M.I.T and A.U.I. The experience that the firm has in the

Companies have to strife for a competitive advantage over its rivals. Industry concentration is measured through concentration ratios. A higher concentration

For new companies to enter the marketplace where Coca-Cola and Pepsi control the majority they need to spend time heavily on branding. The company should be easily recognizable on shelves by name and packaging. Taking, for instance, Voss Artesian Still Water, this water basically like any other water bottle, but the company decided to place the water in glass cylinder bottles reusable for use noticeable to consumers to grab their attention. A company should also give consumers a variety when it comes to their products whether it be types of drinks or flavors. Consumers like that can pick and choose what they want and they can choose with an array of options from sodas, teas, energy drinks, or sports drinks. With the negative connotation that soda drinks receive and slowing sales beverage companies should look toward the future when entering the beverage market and give consumers other options when purchasing

As technology continue to refine how products and services are delivered to consumers, competition among industry participants becomes more refined. Organizations that are able to keep up with changing technologies become leaders while those that are not fall behind. Mergers and acquisitions are increasing while causing small businesses to sell out or seek partnerships and cooperatives in order to remain competitive and relevant.

Gatorade has emerged as the global leader in sports nutrition beverages by continually managing their brand to signify high energy, athletic excellence combine with one of the most efficient new product development and introduced processes in the beverage industry. As a result of being able to consistently synchronize these many components of their business so well, Gatorade today holds a 75% market share in the sports nutrition market globally today. Gatorade is owned by PepsiCo, which has made it possible for the company to sell in 80 countries today. Gatorade relies heavily on the PepsiCo distribution and retail network globally. Gatorades' revolutionary approach to managing branding for beverages has served to increase the total market size for this product category globally (Huang, Sarigöllü, 2012). Despite the continued widespread adoption of Gatorade as a healthy energy drink, the company has encountered resistance to its brand and the ingredients used for creating the many variations of Gatorade energy drinks (Tallon, 2009). Despite these setbacks the Gatorade brand continues to experience exceptional growth and stability over time.

The Intensity of Rivalry among Competitors in an Industry (High): Equally balanced competitors exist within the industry such as BCF and KMD; these firms also face competition from retailers and wholesalers. The growth of the industry is relatively agile in both financial and technological aspects. The intensity or rivalry is further accentuated by relatively high storage and fixed rental costs, extensive product differentiation and minimal switching costs.

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

➢ Product differentiation - Products that are relatively the same will compete based on price. Brand identification can reduce rivalry.