Gatorade brand falls under the PepsiCo umbrella of products and strategy to expand its business further in the beverages industry. Gatorade is very popular among athletes, such that the word 'Gatorade' is almost used in exchange for energy drinks, just like Xerox or Bisleri.
Available in more than 80 countries, the Gatorade marketing strategy enables the brand to hold an astonishing 70%-80% of the global sports drink industry with worldwide sales worth USD 6.7 billion in retail volume. This is due to its immense popularity among its hyper-targeted customer base - the athletes who are looking to improve their athletic performance.
In this article, we will study the Gatorade marketing strategy and how its design helps them capture such a dominant market share in a niche energy and sports drink industry.
Gatorade Sports drink - The Origin Story
Gatorade sports drinks were first developed for the University of Florida Gators in 1965. The Gatorade's inventors were a team of scientists working under the guidance of Dr. Robert Cade and aimed to improve athletic performance. The key was to help student-athletes in the University of Florida team replenish the lost electrolytes and carbohydrates when they engaged in various sports.
In 1983, Quaker Oats Company bought the Gatorade brand which helped them expand and distribute internationally. In 2000, PepsiCo bought Gatorade, which helped them further access its massive distribution to power its marketing strategy.
Source - Gatorade
Today, Gatorade is the leading sports drinks brand in the United States. It's facing stiff competition from innovative brands like Pocari Sweat, which is slowly eating its market share in Asia using its localized marketing mix.
What is the Gatorade Marketing Strategy?
The Gatorade marketing strategy is a great example of playing a niche game when it comes to positioning in the market. Today, the beverages industry competes with Glucon-D, Powerade, Tropicana, and other niche sports drink brands available locally.
Let us study the Gatorade marketing mix and how it helps them stand apart from the crowd to achieve sustainable growth using the 4P marketing mix analysis:
Gatorade Target Audience
Gatorade markets its sports drink products mainly to young adults aged 13 to 24 who are keen to improve their athletic performance. A venture into other product categories also indicates how it aims to diversify its offering to other age groups and cater to various sporting activity needs.
A result of the study of Gatorade's consumer behavior is visible in the wide range of products it manufactures. With PepsiCo's backing, a lot of the Gatorade marketing strategy is influenced by consumer data and reactions to the fierce competition it faces from other energy drinks brands.
All Gatorade products are scientifically formulated sports drinks. It basically helps the human body rehydrate and replenish lost nutrients, amino acid, and electrolytes to enable an active lifestyle. These energy sports drinks are not drug administration prohibited and safe for consumption.
In its early years, Gatorade offered two unique Gatorade thirst quencher products in liquid and powder form - the orange flavors and lemon-lime. After twenty years, the flavors "fruit punch" and "citrus cooler" (lemon juice) was announced in 1983 and 1988, respectively.
Today, Gatorade experiments openly with a wide range of products that go beyond sports drinks. This includes the Gatorade thirst quencher, G Series, snacks, protein shakes, smoothies, energy bars, etc.
For example, its G-Series line is famous for its low calories. Many health-conscious individuals and diabetics prefer G-Series sports drink to carry out their workout. All these are also available in a variety of flavors like lemon lime, cherry, apple, etc.
Gatorade G, unlike the G-Series, is a more commercial product that suits the taste palettes of soft drink enthusiasts, although still providing the necessary nutrition as per its formula.
Source - Campaignlive
Other products include sports nutrition products like Gatorade Frost, Gatorade Energy Bar, and Gatorade Protein Recovery Shake for gym enthusiasts.
It also explored natural flavors in energy drinks - for example, the Gatorade Tiger was released in 2008 in lemon juice, grape, and cherry flavors. It also released Gatorade Light also comes in various flavors to suit the taste buds of fitness enthusiasts.
Source - Gatorade Products
The collective annual sales of the Gatorade line of sports drinks, the Gatorade Performance series, the Gatorade G series, and beyond are more than $5 billion.
All these products provide benefits to different target customers ranging from hardcore athletes to people who do light workouts.
Gatorade used lower prices while entering the market, but today, compared to its competitors, it's priced at a premium. Further entry of new competitors in the sports drink category has made Gatorade slash its prices to maintain its market share.
Gatorade uses a promotional marketing strategy as well to compete and nurture repeat business. While each Gatorade bottle is costing less than $1, one can purchase larger packs that cost between $6 to $15 depending on the type of product, flavors, and number of bottles.
Since Gatorade marketing strategy also involves good diversification, its other products are still priced at a premium, but still less that the market leaders in those industries.
In comparison to Pocari Sweat, Gatorade is priced cheaper. A 12-pack of 500 ml Pocari Sweat bottles costs USD 299, while the same Gatorade costs approximately USD 21 for a pack of 12 Thirst Quencher bottles.
Placement and Distribution Strategy
PepsiCo uses its own extensive distribution strategy and network, making Gatorade available to 80 different countries worldwide. In comparison, its competitors like Pocari Sweat in Asia do not enjoy such a distribution competitive advantage.
Gatorade's products are available across all major online eCommerce platforms like Walmart, Amazon, etc. These sports drinks have a good offline presence in grocery stores, malls, pharmacies, gas stations, vending machines, cafeterias, offices, gyms, etc. The PepsiCo advantage also means presence across the globe including the US, Asia, Australia, Europe, South America, etc.
Source - Beverage Digest
Gatorade is also very active in many sporting events, music festivals, and other such offline experiences where they can set up pop-ups for brand awareness as well as sales.
Source - UFL News - University of Florida website sharing 50 years of Gatorade.
Gatorade actively gets featured in many publications like the Miami Herald and Sports Illustrated. It is active in the sports community and pushes its product lines across wherever any relevant athletic events are taking place.
Today, Gatorade is the official sports drink partner for a variety of organizations like the NFL, NBA, USA Basketball, Indian Super League, Association of Volleyball Professionals, etc. Gatorade also partnered with the Indian super league in 2018.
Many athletes, including Derek Jeter, Dwight Howard, Mia Hamm, Dwayne Wade, Tiger Woods, Serena Williams, Michael Jordon, Vince Carter, etc have worked with the Gatorade brand across many marketing campaigns. This includes how in 1991, Gatorade turned to Michael Jordan for a 10-year endorsement deal, averaging USD 1.4 million dollars annually.
When the brand applied its marketing strategy to enter the UK market, it was named the official sports drink for Chelsea FC. When the Chicago Bulls won the NBA title in 1991, the "Be like Me" advertisements with American basketball player Michael Jordan helped Gatorade further boost its brand.
Source - ArunFoot Blog
Gatorade had also partnered with Tiger Woods as a part of a marketing campaign where they released Gatorade Tiger. Then, due to the controversies that engulfed Tiger Woods, Gatorade removed him from the deal in 2010. Brands need to be careful whom they associate with when executing their marketing strategy with influencers.
Thus partnerships and influencer marketing strategies are a very core part of Gatorade's overall marketing plan.
Source - Trendhunter
Gatorade’s Noteworthy Marketing Campaigns
Like most sports-oriented brands, the Gatorade marketing strategy and marketing mix focuses on showcasing energizing, fresh, and motivating ads. Here are a few examples from Gatorade's marketing mix over the years:
The greatest never settle tv ads
The Greatest Never Settle was Gatorade's worldwide advertising campaign in 2021. It emphasizes the brand's ongoing commitment to supporting the next generation of athletes on their path to greatness.
This includes many famous athletes like Serena Williams, Lionel Messi, Gabriel Jesus, etc., and was a wide success. It was widely played in TV ads, screenings, sports events, and many other placement channels.
Have a look at the Gatorade ad here -
Gatorade turned their campaign's objective to motivate today's athletes and spread the message that, regardless of how excellent you are, you have the potential to be even more incredible tomorrow. Therefore, settling cannot be an option on the road to greatness.
Gatorade celebrates motherhood with Serena Williams
'Like a Mother' is narrated by Serena Williams' mother Oracene Price where she speaks about the journey of postpartum to getting back into the game for her daughter. It shows how motherhood doesn't get in the way of still being the greatest player and inspires many more by raising awareness.
Check out the video here -
You can view many more of the Gatorade marketing campaigns and advertisements here to know more about its sports drink marketing strategy - Gatorade Newsmarket
Gatorade Sports Science Institute
Source - Wikimedia Commons
Gatorade Sports Science Institute (GSSI) was started in 1985 to use scientific research in the nutrition science space for enabling athletic performance. Gatorade has partnered with various universities across continents to offer research grants to students for supporting research and development in the area of athletic nutrition. Its dedicated electrolyte division conducts research on improving the product lines across thirst quencher, adding flavors, etc.
Going beyond the sports drinks category
Gatorade has produced sports drinks since its foundation, from enhancing great athlete strength for the University of Florida, USA basketball players to date. Gatorade supports and is highly involved in the athletic community.
From enabling brand ambassadors, to aligning with football player of high school sports teams - Gatorade is open to taking unconventional routes to execute its marketing mix.
Here are some more examples of how the Gatorade sports drink pushes its products - Gatorade ad campaings
The Gatorade Shower
The Gatorade Shower, also known as the Gatorade drunk, is a popular sports tradition that involves players dumping Gatorade with ice over their coach's head. They can also be a high-profile assistant coach, celebrity players, or team owners in professional leagues. e.g., Michael Jordan). This tradition is adopted for many high-profile games like the Super Bowl or any other major sporting event.
A recurring tradition as a marketing strategy generates excitement, a sense of belonging, and pride among those involved as participants or spectators. You can watch how Gatorade Sports Drink conducts the Gatorade Shower here -
Many such compilation videos further help Gatorade market its brand across YouTube channels and video-based social platforms, hence complementing its marketing mix.
To grow its athletic community, Gatorade has built 'Fuel Tomorrow' - where it is committing $10 million to bridge gaps for health, equipment, access to mentors, and other factors that help with the creation of a great athlete. Many sports enthusiasts who drink Gatorade across the world are a part of this network.
Gatorade also pushes its merchandise, including bottles to drink Gatorade or thirst quencher, which is a limited edition in nature. They also elevate the voices of the under-represented sporting communities via interviews and features.
Community building is a great marketing strategy for a sports drink brand because very few exist.
Key takeaways for Entrepreneurs from Gatorade marketing strategy
Making Gatorade was successful due to a great product that got backed by its wide distribution strategy of PepsiCo. If you're building a retail business in the energy drinks, beverages industry, or beyond, here's what you can keep in mind:
Spend money on R&D for product and process development
A key component of R&D is the ongoing assessment of existing goods, services, and processes. A product, service, or process runs the danger of stagnating if it is no longer lucrative or valuable to the market. However, it's also possible that technology has been created that could enable advancements that might reduce prices, increase efficiency, or enhance safety.
Source - University of Florida research website
This may involve making adjustments to the product's manufacturing and production procedures. In addition, a product or method may need to be altered or developed to be viable if there are changes to the law or changes in consumer preferences.
Adopting such practices enables you to stay in touch with the market and technology so that you never fade away due to these two core company stagnation reasons.
Target a niche market
Gatorade helps PepsiCo tap into the niche beverage segment of sports drinks. Such arrangements simplify your marketing strategy and brand-building efforts since it helps you focus deeply on a set target customer and their expectations.
Changes to your business should be motivated by your consumers. Maintaining a focus on your customers while adjusting to market developments is essential. Choosing a niche becomes easy as you learn more about your target demographic than just the statistics.
A good acquisition can take a brand to immense success
Source - NYPost
Gatorade could scale immensely due to the strong distribution network of PepsiCo. For any retail business, the execution of a good distribution strategy is key to successfully reaching the masses. PepsiCo has fueled Gatorade to new heights with more than 70% market share, from releasing new products, investing in nutrition research, and sponsoring campaigns.
If you liked reading about Gatorade's case study, you could also check out its competitor Monster Energy Marketing strategy or its parent, Pepsi's marketing strategy, for more insights.