marketing plan outline from mam beth

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Marketing Plan – Sample Outline

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There are a variety of styles and formats used for marketing plans. The followingsection headings will help you organize your plan. The content of the plan is much moreimportant than rigid adherence to a specific format.

Executive Summary

The Executive Summary highlights the main goals and recommendations of themarketing plan. It should also briefly address budget requirements and how success willbe measured.

Business Overview

This section is sometime referred to as the Situation Analysis segment. In a typicalmarketing plan, it contains relevant background on the market, product, pricing, anddistribution situations as well as on competitors. Information Centers can describe their business in these terms as well. Assuming the planning process takes place at the endof a fiscal year, this section may be a recap of the business for the past 12 months.Consider describing your customer base, services required by your customers, andenvironmental factors affecting your operation. Yes, Information Centers havecompetition. How has the Internet affected your business? Are other departments

loading content for their use? Include any hard or anecdotal data on ROI available toyou, as well as information on the Information Center’s impact on the business.

Some marketing plan templates include the SWOT (Strengths, Weaknesses,Opportunities, Threats) Analysis in this segment. Others insert a separate segmentdevoted to the SWOT Analysis. In the light of the business situation just described, youmust now reflect on strengths and weaknesses of your operation, as well asopportunities and threats to be dealt with in the coming year.

Target Market

How well do you know your target market? How well do you understand their information needs? Can you articulate what your customers and potential customersneed as opposed to what you offer? Are there groups to whom you should be “selling”who are not now “buying” your services? Are there ways to segment your market so thatyou can offer highly specialized products and services to various groups, reflecting their business priorities? What kind of products should be offered to a broad base of users?Answering these questions will help you define your target market.

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Goals

What do you want to achieve? The goal statement(s) should be challenging and yet,

attainable. Is it important to increase the number of departments served? Whichdepartments? Do you intend to provide more training programs? Sample goalstatements might read:

1. Establish relationship with Legal and Regulatory Departments in first quarter.2. Reduce staff time spent on call-in, ad hoc requests for help with Internet searching

Marketing Strategies

Here strategies and programs are outlined which will help us reach the goals outlinedabove. For the two goals suggested previously, strategies might read as follows: 1. Provide daily news delivery for all persons in Legal and Regulatory Departments on

trial basis for 2 weeks as first step in increasing business with these departments.2. Increase the number of Internet training sessions by 10% over the course of the

year.

Implementation Tactics

Tasks required to implement and monitor each strategy are listed in this section. Witheach task, the person responsible for the task, and a completion target date areindicated. Having a plan of action with specific tasks ensures that the details are clear and that specific persons are accountable. For example:

1. Daily news delivery trial for Legal & Regulatory Departments

Task DescriptionPerson

ResponsibleCompletio

n Date a)

Meet with Department Directors to promote plan,including budget implications for departmentsfollowing trial.

M.L.1

/15

b) Meet with vendor to set up trial. J.V. 1/15 c)

Work with vendor and designates from eachdepartment to define profiles. M.L., J.V.

1/22

d)

Schedule meeting with all members of bothdepartments to pro-mote trial; sell concept of customization following 2-week trial.

M.L.1

/30

e) Launch trial. All 2/1



f) Schedule mid-trial meeting for feedback andrefinements.

J.V. 2/8

g) Assess trial results. M.L., J.V. 2/15h) Launch customized news delivery to groups. J.V. 2/18i) Review on quarterly basis. M.L., J.V. 4/1,7/1,10/

1

2. Increase the number of Internet training sessions by 10% over the course of theyear.

Task DescriptionPerson

Responsible

Completion Date

a)

Review most frequent requests for help with Internetand deter-mine appropriate applications for classes. D.H.

1/15

b) Contact Consultant to design course on government

sites

D.H. 1/20

c)

Review course proposed by consultant and settargets for testing. M.L., D.H.

1/30

d) Trial run of course with Information Center staff. D.H. 2/20e) Schedule and promote course for organization D.H. 3/1f) Review and modify, if needed, based on evaluations. D.H.,

Cons.3/15

Budget

How much will the activities defined above cost? Can you provide a revenue forecast?Explain the assumptions on which the forecast is based and consider various (bestcase, worst case) scenarios. Since many Information Centers now operate as costcenters, if not profit centers, this component of the plan is extremely important.

Evaluation of Results

What are the success criteria? How will you measure success of the plan? By

monitoring progress, you can judge the success of the marketing plan. If some of thestrategies are not working out, try to determine why. Is the strategy flawed? Is there aproblem with implementation or timing? How can you refocus and move on?



M ARKETING PLANOULINE

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Executive Summary

Introduction

Background, Purpose and Objectives

Environment Analysis

External Analysis

Macro environment

Demographics, Cultural & Social, Political Analysis, Economic Analysis, Technological Analysis

Market Analysis

Competition Analysis

Internal Analysis

Performance Analysis, Management and Staff, Infrastructure and Delivery, Customers

SWOT Analysis

Strengths, Weaknesses, Opportunities, Threats

Fundamental Marketing Strategies

Supply Strategies, Demand Strategies, Positioning Strategies, Competition Strategies

Marketing Mix Strategies

Product, Price, Place, Promotion, People

Implementation and Control

Implementation, Control

Financial Forecast

Conclusion

Table of Contents

Executive Summary ........................................................................................................................ 2Part I: Introduction and Objectives ................................................................................................. 3Background ............................................................................................................................. 3Problem Identification ............................................................................................................ 3Financial and Marketing Objectives ....................................................................................... 3Part II: Market Analysis .................................................................................................................. 5Market Situation and Macroenvironment ............................................................................... 5Product Situation ..................................................................................................................... 6Competitive Situation ............................................................................................................. 6Distribution Situation .............................................................................................................. 6SWOT Analysis ...................................................................................................................... 7Part III: Primary Marketing Research ............................................................................................. 9Research Objectives ................................................................................................................ 9Methodology ........................................................................................................................... 9Results ................................................................................................................................. 10Part IV: Marketing Strategy .......................................................................................................... 11

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Introduction ........................................................................................................................... 11Target Markets ...................................................................................................................... 11Positioning, POWERade ....................................................................................................... 11Positioning, Option ............................................................................................................... 11Marketing Mix, POWERade ................................................................................................. 12Marketing Mix, POWERade Option ..................................................................................... 12Research and Development and Future Market Research .................................................... 13Budget and Action Plan ........................................................................................................ 13Monitoring and Controls ....................................................................................................... 14Appendix A: Nutritional Comparison ........................................................................................... 15Appendix B: Survey ...................................................................................................................... 16Appendix C: Results ..................................................................................................................... 20Appendix D: Marketing Budget.................................................................................................... 23Appendix E: Timeline ................................................................................................................... 24

Page 1 of 1



Executive SummaryPOWERade has traditionally focused on targeting bodybuilders and serious athletes. However, thetarget demographic is now shifting to more mainstream athletes, and the marketing mix does notreflect these changes. We present a revised marketing plan that should increase revenue by 49% to

$250 million a year. The marketing plan separately addresses the flagship product POWERade andthe newer POWERade Option.

Research

Through market research, we have discovered two key findings about this target marketthat will shape a new marketing strategy for POWERade.

Our first key finding addresses what factors are important when choosing between sportsdrinks. Due to its focus on serious athletes, POWERade advertising has focused on theingredients and benefits of its sports drink, touting itself as superior to rival Gatorade. This isineffective for mainstream consumers – the most important factor in the buying decision istaste. This will come into play with promotions for POWERade.

The second key finding involves the bottled water market. Bottled water is a $9 billionindustry domestically, and expanding into this market could result in substantial financialbenefits. However, survey data indicates that over 70% of respondents do not consider sports drinks a substitute for water. Thus, we propose marketing two different products: oneaimed at the bottled water market and one at the sports drink market.

Marketing Strategy

We present a dual-pronged marketing strategy.1 POWERade will concentrate on solidifying its position in its current market andaggressively targeting more casual athletes.2 POWERade Option will be marketed as a fitness water to the more mainstream

health-conscious demographic.

POWERade. For POWERade, we know that we want to focus on taste. While no changesare needed to the POWERade formula, we propose clearly identifying the flavor on the labelof the bottle (Mountain Blast, for example, is ambiguous.) Promotions should berestructured to focus on taste rather than ingredients.

POWERade Option. At launch, Option was positioned as a diet sports drink. Instead, wesuggest positioning it as a fitness water. By offering it at a price comparable to other bottledwaters and offering additional benefit, we can capture market share in the bottled water market. The most important part of the Option marketing strategy is to vastly expandcoverage; take advantage of POWERade distribution channels to allow Option to permeate

the market. In addition, offer below-the-line advertising programs at health clubs toshowcase Option’s added benefits.Page 2 of 2



Part I: Introduction and Objectives

Background

POWERade was first introduced in 1990 by the Coca-Cola Company. It is a sports drink –

designed to rehydrate athletes as well as restore carbohydrates, B vitamins, andelectrolytes drained during exercise. Up until 1990 the sports drink market had beendominated by Pepsi’s brand Gatorade, which is still the market leader with 85% marketshare. However, POWERade is currently the second largest sports drink brand with 14% of the sports drink market.

More recently (in 2005), Coca-Cola launched POWERade Option – a low calorie version of POWERade. Option contains about a fifth of the calories as its heftier counterpart, while stillcontaining many of the same important nutrients.

Coca-Cola also manufactures an energy drink called POWERade Advance, but this is not afocus of this marketing strategy.

Problem IdentificationCore Market Changes. POWERade’s core demographic is shifting. When POWERade wasintroduced, its primary customers were professional bodybuilders and athletes. In recentyears, however, there has been a shift and the main consumers of sports drinks are casualathletes and those interested in overall fitness. The marketing mix does not reflect thischange.

Ineffective Advertising . Although POWERade has gained LeBron James as aspokesperson, their advertisements do not seem to be effective at showing the benefits of POWERade compared to Gatorade.

Financial and Marketing Objectives

POWERade’s domestic sales for the previous year were $169,898,770. After carefullyconsidering the impact of our proposed marketing changes, our financial objective is toincrease annual revenue by 49% to $250 million per year. While this may seem ambitious,we can do this by vastly increasing the target market segment and forging a new advertisingcampaign.

To establish a benchmark, one can calculate the expected revenue increase without any marketing strategy changes. Coca-Cola revenue has typically risen by 5% every year, andfrom this we anticipate POWERade to enjoy increased revenues of $7.7-15.4 million due tonatural growth.

We expect to be able to generate $45 million in revenue by tapping into the growing bottledwater market. We make the conservative estimate that increased marketing of POWERade

Option can capture at least 0.5% percent of market share. Note also that Option is backedby Coca-Cola, which allows for access to an extensive distribution infrastructure.

We also expect the updated marketing mix for POWERade to perform well. By launching anadvertising campaign targeted at the major factors involved in the buyingPage 3 of 3



decision, we hope to gain ground quickly. Conservatively, if we capture just 3% of the sportsdrink market, we will earn $30 million in revenue.Page 4 of 4



Part II: Market Analysis

Market Situation and Macroenvironment

The global sports drinks market is strong, with sales of $15,368.3 million. These figures

reflect the global market, and though our marketing strategy will focus on the US market, itis reasonable to assume that these strong global numbers reflect the strength of the USmarket.1

The sports drinks market has been expanding in recent years. Ten years ago, sports drinkswere typically consumed by serious athletes and body builders. The target market nowincludes people ranging in age from their teenage years to the 40s who have an interest insports. Note that these people do not necessarily play sports regularly. There are threecommon occasions for consumption of sports drinks: after sports activity, for breakfast, and“on-the-go.” As a result, companies are reducing their focus on sports in order toaccommodate these consumption patterns.

Sports drinks are generally viewed as a masculine product. The male to female ratio of the

market is 4:1. Clearly males are targeted over females in this market, but data show thatfemales also purchase the product regularly.

The bottled water market is a $9.4 billion market (2004) increasing by 10% every year asconsumers turn away from soft drinks in favor of healthier alternatives. Water continues tobe the beverage of choice when being active with 4.1 billion gallons consumed annually.Water consumers are not brand loyal, typically choosing the brand with the lowest price.Only 10% of bottled water consumers refer to brands as their favorite compared to 37% of soft drink drinkers.

The enhanced water market is relatively new being referred to as a niche market. Theenhanced water market is one the fastest growing markets in the US growing from $20million in 2001 to a estimated $600 million in 2007. The enhanced water market is predicted

to hit $5.6 by 2010. Unlike bottled water which is perceived as a commodity eroding brandloyalty, enhanced water is perceived as water with extra benefits differentiating productsfrom each other creating a strong sense of brand loyalty. As a result of this added valueenhanced water products sale for 40% more then their plain counterparts. The typicalenhanced water consumers are baby boomers who are getting older and looking for healthyproducts in an effort to stay young. Traditional bottled water drinker had an exceptionalpreference for fitness water resulting in Gatorade’s Propel producing $100 million inrevenue the first year 60% of the enhanced water market. Bottled water drinkers enjoy thelight flavor of enhanced water whereas they report not liking the color or taste of traditionalGatorade sports products.

Looking at the macroenvironment, concern over obesity has been rapidly rising in recent

years, opening up a much larger market for weight-loss themed products. POWERade hasOption to handle this market, although Option’s positioning is not entirely focused on thisdemographic.

1 This is the only location where we cite global figures. For the remaining parts of the marketing plan, weconcentrate on the domestic market.

Page 5 of 5



Product Situation

In the sports drink industry POWERade currently holds a 14.3% market share, up 0.6%from the previous year. The annual sales for the 52 weeks ending June 12, 2005 were$169,898,770. Although 2005 sales are up nearly 17% from previous years’ sales,

POWERade still lags far behind its major competitor Gatorade.POWERade is a product of the Coca-Cola Company, which does not release sales data for its individual product line. The net revenue for the Coca-Cola Company in 2004 was$21,962 million and POWERade makes up 0.77% of these sales. Financial data regardingthe POWERade brand will be a scaled version of this data.

The current price for POWERade is $1.25 on average when it is purchased by the bottleand approximately $0.83 per bottle when purchased in a multi-pack. These figures are for the standard 20 oz. bottle.

2005 brought changes to the POWERade products. The Coca-Cola Company introduced aredesigned 20 oz. POWERade bottle early in the year. This bottle had functional purposesas well as being a step toward differentiating the POWERade brand from its competitors. In

addition POWERade Option was launched in the summer of 2005. It focuses on hydrationand is a lower calorie alternative to the traditional formula.

Competitive Situation

The main competitor of POWERade is Gatorade. The combined market share of allGatorade products is 84.7% of the sports drink market. These Gatorade products includetraditional Gatorade, Gatorade Frost, Gatorade Fierce, Gatorade X Factor, Gatorade AllStar, Gatorade Ice, Gatorade Extremo, and Gatorade Endurance Formula. The combinedsales for these Gatorade products were $2.1 billion for the 52 weeks ending June 12, 2005.In this time period Gatorade has seen a 0.1% increase in its market share. Gatorade hassponsorship deals with the National Football League, National Basketball Association,

Major League Baseball, Major League Soccer. It also has a long history, being the firstsports drink on the market when it was introduced in 1965. More recently Gatorade hasextended their product line to include Propel Fitness Water, which competes withPOWERade Option.

Both Gatorade and POWERade come in a wide variety of flavors and the two brands arecomparable in price. Also, both are primarily sold in plastic bottles, but also offer a powder form. See Appendix A for a side-by-side comparison of the nutritional features of POWERade and Gatorade.

Other competitors of POWERade include AllSport, Protein Ice and various other sportsdrinks. These products only make up 1% of the market.

Various bottled water brands pose competition to POWERade Option. The bottled water

industry was a $9.1 billion dollar industry (domestic) in 2004 – a substantially larger marketthan sports drinks.

Distribution Situation

POWERade chooses to mainly target athletes. As such, its products are found in healthclubs, grocery stores, and to a lesser extent sports events. It has a large coverage, enjoying83% coverage in retail stores and 65% of convenience stores.Page 6 of 6



It is sold in 20-, 32-, 64- and 128-ounce bottles. These bottles have different distributions,with the 32-ounce bottle enjoying considerably greater popularity than the 20-ounce and 64-ounce ones.

Supermarkets make up approximately one-third of POWERade’s sales. Sales fromsupermarkets generally apply to already loyal customers.

One of the strongest distributive advantages that POWERade has is its exclusive contractwith the YMCA. The YMCA is one of the largest and most well-known chains of healthcenters across the United States, and POWERade’s contract with them is a strong benefitto awareness and market share.

The availability of POWERade Option is limited. This is something that is addressed in themarketing plan.

SWOT Analysis

Strengths. POWERade’s strengths are that it is a product of Coca-Cola, has lower pricesthan its competitors, holds celebrity endorsements, and maintains contracts with varioussports organizations. POWERade is a product of the Coca-Cola Company, one of the

largest and most established beverage companies in the world. Because of this,POWERade can reap several benefits from its parent company, such as its well-establisheddistribution channels, numerous business partners, and monetary resources. The prices of POWERade products are, on average, about 70% of those of its main competitor,Gatorade. POWERade has also struck deals with professional athletes such as LeBronJames for the promotion of its products. In addition, POWERade has contracts with manymajor sports organizations such as NASCAR, the NHL, the NHRA Drag Racing Series, theOlympic Games, and many college campuses throughout the United States.

Weaknesses. POWERade’s weaknesses include controlling only a fraction of the sportsdrink market, holding fewer sponsorship contracts than its competitors and a lack of scientific evidence proving POWERade’s effectiveness. POWERade controls approximately

14% share of the sports drink market while Gatorade enjoys approximately 85% of themarket share. Also, POWERade does not have as many deals with sports organizations asGatorade. In addition, POWERade lacks the scientific studies proving its effectiveness asopposed to the extensive tests that Gatorade has conducted.

Opportunities. The main opportunities for POWERade include the increasing awareness of healthy living in the United States, athletes looking for sports beverages targeted to their specific needs, new sports organizations, and rising professional athletes. People in theUnited States are increasing their awareness of what they eat and drink and are increasingtheir exercise and fitness training. This yields a greater number of athletes and hence agreater number of consumers for POWERade. With the different forms of exercise fromweight training to aerobic exercises, athletes are looking for the optimal beverage to targettheir needs. With its variety of sports drinks, POWERade will be able to supply specificbeverages to target consumers. In addition, with the increase in various sportsorganizations such as the X-Games, POWERade can broaden its contracts and increaseconsumer awareness. Further, with the rise of young newPage 7 of 7



P&G Philippines Brand History

Coconut-Based Cleaning and Food Products

1919 Purico1931 Star Margarine (first in local market)1949 Perla

Sunshine Margarine1950 Camay (first in local market)1951 Mayon Cooking Oil1952 PMC Laundry Soap1954 Victor Shortening

1965 Ola & Agro Laundry Soap1956 Fresco Bath Soap

Innovative Laundry and Personal CleansingProducts

1957 Tide Detergent Powder (first in local market)Gleem Toothpaste

1959 DariCreme Refrigerated Margarine (first in local market)1961 Primex Shortening1966 Safeguard Germicidal Soap (first in local market)1968 Ariel Detergent Powder 1969 Gain & Bonus Detergent Powder 1971 Daz Detergent Bar (first in local market)1972 Lava Detergent Liquid1975 Mr. Clean Detergent Bar 1979 Prell Shampoo1981 Crest Toothpaste1982 Zest Bath Soap1984 Moncler Bath Soap1985 Tide Detergent Bar 1986 Ivory Bath Soap

Health Care

1987 Vicks



Hair Care and Laundry Categories

1988 Pampers (first in local market)1989 Whisper (first in local market)1989 Rejoice 2-in-1 Shampoo (first in local market)1991 Tide Ultra (first in local market)

Pantene Shampoo and Conditioner 1992 Max Factor 1993 Vidal Sassoon Hair Care Line

Ivory Shampoo and Conditioner

Dishwashing, Fabric Care and Food Categories

1994 Joy Dishwashing Liquid (first in local market)1996 Mr. Clean for Washing Machines

Downy (first in local market)1997 Alldays Pantiliners1998 Pringles

Laundry, Personal Care and Hair Care1999 Secret Deodorant2000 Safeguard Deodorant

Ascend Shampoo and Leave-On Conditioner Safeguard Hand Sanitizer

2001 Ariel Detergent Powder Safeguard Body WashOld Spice DeodorantZest ReintroductionClairol Shampoo and Conditioner

2003 Wella Hair Care Products2005 Camay Reintroduction

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athletes POWERade will be able to strike deals with star athletes to endorse its products.

Threats. Gatorade is the major threat to POWERade. Gatorade has immense brandawareness due to its sponsorship contracts, and it is very similar to POWERade. UnlessPOWERade can distinguish itself, it risks being labeled as a cheap clone.Page 8 of 8



Part III: Primary Marketing Research

Research Objectives

In order to reach our financial and marketing objectives, it is of utmost importance to

research the attitudes and preferences of POWERade consumers. Through our survey, weaimed to gather data regarding:1 When do consumers drink sports drinks?2 What are consumers’ purchasing habits for sports drinks?3 How do consumers compare POWERade to other brands?4 What factors are most important in choosing a sports drink?

In addition, recall that we also considered bottled water a competitor to sports drinks. Wewanted to use this survey to determine the feasibility of entering this market, as well as anyexpansion potential. Most important is the following question:1 Are sports drinks a substitute for water?

For example, if it is found that sports drinks are significantly perceived as a substitute for water, a more aggressive approach could be taken to the water-drinking market segment.Altogether, this data will help us to understand – among other things – how POWERade’smarketing mix need to be altered to meet the wants and needs of consumers.

Methodology

The data collection method we chose to use was an internet survey. Surveys are well-suitedfor collecting descriptive research, which was our main goal. Due to time and budgetconstraints we chose to conduct our survey over the internet. Also, we decided to post asurvey on our own web page as opposed to using a “survey website.” This allowed us morecontrol over the format of the survey and the number of questions asked.

In order to achieve a large sample size, we administered the survey through email. Weestimate that 120 surveys were sent. The final sample size was 86.

Due to our contact plan, our survey may not be highly representative of the market as awhole. The main issue is that we sent surveys to people we know, who are presumablysimilar to us. We were careful not to just send our survey to a single, closed social group;given the diversity among our group members, we believe that this bias is reduced.

Regarding the reliability of our survey, a sample size of 86 is small in comparison to the sizeof the market. Increasing the number of respondents would improve reliability, but given thetime constraints we feel that we achieved a sufficient level of reliability for our purposes.

Through careful construction of the survey we believe we achieved a high level of validity.Each question and the provided answer choices were written to ascertain the necessarydata. The questions were ordered in a particular way as not to compromise the validity of the survey. The distributed questionnaire is included in Appendix B.Page 9 of 9



Results

Results are included in Appendix C. There are two key findings that merit attention.

Out first finding is that ingredients are not a major factor for people choosing a sports drink (Q4). POWERade has relied on advertising that touts its higher nutrient content over

Gatorade, which our survey shows is ineffective. Instead, taste is the most important factor – something that needs to be addressed in advertising.

This result may seem surprising. The entire advantage of sports drinks over bottled water are the enhanced ingredients they contain, and this is not a major factor in buyingdecisions. The rationale is that rather than looking for the sports drink that provides thehighest benefit, consumers look for drinks that satisfy some minimum level of enhancement.

The second key finding is that over 70% of the target market does not consider sports drink a substitute for bottled water (Q6). This is a not surprising discovery, but it does haveimmediate implications for developing a marketing strategy. There is also a lot of usefulinformation on attitudes towards bottled water: the most important factor for people drinkingbottled water is price (Q9) and while sports drinks tend to be bought by the bottle, water

tends to be bought by the case.Page 10 of 10



Part IV: Marketing Strategy

Introduction

In the past POWERade has focused on targeting bodybuilders and serious athletes. Recall,though, that sales to this segment have declined by over 50% from the 1980s. Expansion isnecessary to survive. This will not be a problem since there has been a trend towardsincreased health awareness in recent years.

From our survey, over 70% of our target market does not consider sports drinks a substitutefor water. As such, a dual-pronged marketing strategy is necessary.1 POWERade will concentrate on solidifying its position in its current market andaggressively targeting more casual athletes.2 POWERade Option will be marketed as a fitness water to the more mainstreamhealth-conscious demographic.

Target Markets

POWERade’s target market is both serious and casual athletes. The target agedemographic is between the ages of 13 and 40, keying in on those who are in college. It isalso important to target females, as sports drinks are generally considered a masculineproduct and casual athletes are not as skewed in terms of gender.

POWERade Option is being positioned within the bottled water market. We expect thegreatest amount of success with consumers who drink bottled water during exercise andthose who desire weight loss, and thus these groups comprise the target market.

Positioning, POWERade

In the past, POWERade has positioned itself as a sports drink with more beneficial andeffective ingredients. This is ineffective, from the survey results, the most important factor

when choosing a sports drink is taste, not ingredients. Hence, POWERade shouldreposition itself to emphasize its wide range of flavors and their appealing tastes.

We suggest the following positioning statement: For athletic individuals, POWERade offersthe best tasting sports drink and a wide range of flavors without sacrificing content.

Positioning, Option

POWERade Option was positioned at launch as a diet sports drink, a low-calorie alternativeto POWERade. The best way to position this product, though, is as a fitness water product.Since the target market for Option should be people who currently drink bottled water, it isimportant for them to view this product as a water rather than a sports drink.The following positioning statement would work well: For health-conscious individuals,

POWERade Option offers great-tasting water with all the essential nutrients and electrolytes for great lifetime health.

Page 11 of 11



Marketing Mix, POWERade

Price. POWERade’s price is approximately $1.25 per 20 oz. bottle when purchasedindividually and about $0.83 per 20 oz. bottle when purchased in a multi-pack. These pricesare lower than those of competitors like Gatorade. As price was the most important factor

for only about 10% of those surveyed, it is best for POWERade to keep its current pricesunchanged.

Product. In order to uphold its new position focused on taste, POWERade must provideconsumers with labels identifying distinct tastes describing the flavors it sells. WhilePOWERade bottles clearly identify each flavor’s name, these names do not identify whatfruits or other flavoring the drink actually tastes like (i.e. Mountain Blast, which is berry-flavored). This is in contrast to Gatorade, which does show the actual taste on bottles. Thus,the labels on the bottles should clearly state what the drink tastes like in addition to itstrendier POWERade flavor name.

Since survey data shows nutritional content (i.e. ingredients) is not of a high level of importance for most consumers, the formulation should stay the same. This will maintain

the product’s current hydration and mineral benefits and avoid incurring unnecessary R&Dcosts. In addition, this will prevent us from alienating athletic customers who choosePOWERade for its ingredients.

Place. POWERade currently enjoys 83% coverage in retail stores and 65% of conveniencestores. They should continue distributing through their supermarket channel as well aslarge-scale retailers like Wal-Mart, but should also focus on wholesale clubs and health andfitness clubs. Selling at health and fitness clubs, like the YMCA, helps POWERade increaseits awareness and in turn, its market share. Further, POWERade should continue to makedeals with college campuses across the United States to key in on their target demographicmarkets.

Promotion. POWERade must restructure its advertising campaigns to highlight a new

position on appealing taste rather than beneficial ingredients. Television advertisementsshould identify the benefits of the drink but the emphasis should be on showing howappealing the taste of POWERade is. In addition, to attract more females to drinkPOWERade, contracts should be made with female professional athletes.

POWERade sales tend to be seasonal. Since sales are lower during the winter seasonwhen compared to the summer season, POWERade should look into offering salespromotions such as coupons or rebates for multi-packs bought during the slow seasons.Another way to counteract this problem is to increase POWERade’s visibility at NationalHockey League games. POWERade already holds an exclusive contract with the NHL, andshould use the Stanley Cup Playoffs to boost consumer awareness of the product justbefore the prime summer selling season.

Marketing Mix, POWERade OptionPrice. Although survey results suggest that price is the deciding factor when buying abottled water, this is mainly due to the fact that there is no product differentiation in thebottled water market. POWERade Option should be offered at a price comparable to other bottled water brands – Option has additional appeal over traditional bottled water marketand by eliminating price differentials, share should rise dramatically.Page 12 of 12



Product. Like POWERade, Option should clearly identify taste on bottle labels. Otherwise,the product needs no further adjustments.

Place. The most obvious distribution channel to discuss is retail venues like supermarkets.Perhaps because of its youth, Option has poorly developed coverage. A major priorityshould be to offer Option at most retail venues where water is sold. It is also important to

have Option displayed in the bottled water section rather than the sports drink section inorder to support our positioning of the product.

From the survey data, Option should be offered by the case (at supermarkets and similar venues), since bottled water consumers tend to buy in bulk. Also, selling the drink throughwholesale clubs such as Sam’s Club or Costco will allow people to purchase largequantities of the product at relatively low prices – this will help attract price-sensitiveconsumers that would have normally bought bottled water because of its lower price.

As another major distribution channel, Option should be aggressively marketed in healthclubs as this is the best place to encounter our target demographic.

Promotion. Standard advertising should be handled similarly to POWERade, although careshould be taken to ensure that people don’t confuse the two brands. This confusion is

unlikely due to the different tones of the advertising campaigns: while POWERade alreadyhas good market exposure and will focus on marketing its great taste, POWERade Optionwill be billed as a great solution for those trying to lose weight or those interested in lifetimehealth.

For POWERade Option, below-the-line programs are far more important. In particular, freesamples at health clubs are essential to showcase the added benefits of Option over standard bottled water. This is the main thrust of Option promotion – by convincing peopleto switch to Option, we can build brand loyalty to a product new in the water market.

Research and Development and Future Market Research

Positioning itself around its appealing taste, POWERade should develop new flavors

according to future market research. Surveys should be conducted to determine whichflavors each target segment would like to see. POWERade should try to reveal a new flavor every four months to reinforce its taste-focused position. In addition, POWERade shouldconsider dropping flavors that show weak sales in order to accommodate new flavors. Thiswill ensure that “shelf space” will not become a problem.

Budget and Action Plan

The budget is included as Appendix D.

The action plan can be best viewed as a timeline, which has been included as Appendix E.The resources of Coca-Cola are substantial enough that these measures can beimplemented by the company without outside assistance.

It is of utmost importance that new television commercials are released on time (earlyAugust 2006). This leaves only three months to complete the ads, but will increasePOWERade’s brand awareness before the National Football League season starts andGatorade becomes more visible. It would be ideal to start this campaign in early June 2006to capitalize on the seasonality of the product. However, we do not recommendPage 13 of 13



this because television commercial quality would be sacrificed and higher costs would beincurred if the process were rushed.

Beginning the free sample promotion in October 2006 will allow adequate time to obtain acontract with health club chains. This is the time of year that people who tend to exerciseoutdoors during the summer will be heading back to the gym. After the one month

promotion, the sales of POWERade and Option in health clubs should begin immediately.The rebate promotion is set to start in January 2007 and run through mid-February 2007.This coincides with the slow winter period caused by the seasonality of the product.

Finally, an evaluation of the overall progress and success of the campaign should takeplace one year from now, in May 2007. The details of this evaluation will be explained in theMonitoring and Controls section. At this time a decision should be made whether further contracts with health clubs are advisable.

Monitoring and Controls

The primary way to monitor the effectiveness of the new marketing strategies will be toexamine the revenue of POWERade and Option separately. Compare the sales figures

from the six months prior to the debut of the new ad campaign and the six months thatfollow. Market share for POWERade and Option should be measured as well.

The health club contract and promotion will not begin until October, so this should beevaluated in May 2007. This is a completely new strategy for POWERade, so it is advisablenot to judge the success of the plan before it has a chance to become effective.

It should be examined whether cannibalization of Dasani, Dannon, and Sparkletts (other brands of Coca Cola water) has taken place due to the repositioning of Option. Although thepositioning of Option was designed to minimize cannibalization while making substantialgains in market share from competitors, it is recommended to do a full analysis of thecannibalization rate.

Finally, a survey should be conducted to ensure there is no confusion among consumers

regarding the differences between traditional POWERade and Option. These productstarget different segments and it is important that consumers are able to differentiate them. If this proves to be an issue, the television ad campaign should be revamped to more heavilydifferentiate the two products.Page 14 of 14



Appendix A: Nutritional ComparisonThis is a side-by-side comparison of the nutritional value of

Gatorade and POWERade. Note that POWERade fares

better in this comparison, despite its lagging market share.

POWERade

Gatorade

% Carbohydrates 8% 6%Carbohydrates 19 g 14 gCalories per 8-oz serving 70 50Sodium per 8-oz serving 55 mg 110mgPotassium per 8-oz serving 30 mg 30 mg

marketing plan outline from mam beth

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