Table of Contents

Executive Summary ........................................................................................................................ 2

Part I: Introduction and Objectives ................................................................................................. 3
Background ............................................................................................................................. 3
Problem Identification ............................................................................................................ 3
Financial and Marketing Objectives ....................................................................................... 3
Part II: Market Analysis .................................................................................................................. 5
Market Situation and Macroenvironment ............................................................................... 5
Product Situation..................................................................................................................... 6
Competitive Situation ............................................................................................................. 6
Distribution Situation .............................................................................................................. 6
SWOT Analysis ...................................................................................................................... 7
Part III: Primary Marketing Research ............................................................................................. 9
Research Objectives ................................................................................................................ 9
Methodology ........................................................................................................................... 9
Results ................................................................................................................................... 10
Part IV: Marketing Strategy .......................................................................................................... 11
Introduction ........................................................................................................................... 11
Target Markets ...................................................................................................................... 11
Positioning, POWERade ....................................................................................................... 11
Positioning, Option ............................................................................................................... 11
Marketing Mix, POWERade ................................................................................................. 12
Marketing Mix, POWERade Option..................................................................................... 12
Research and Development and Future Market Research .................................................... 13
Budget and Action Plan ........................................................................................................ 13
Monitoring and Controls ....................................................................................................... 14
Appendix A: Nutritional Comparison ........................................................................................... 15
Appendix B: Survey...................................................................................................................... 16
Appendix C: Results ..................................................................................................................... 20
Appendix D: Marketing Budget.................................................................................................... 23
Appendix E: Timeline ................................................................................................................... 24

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Executive Summary
POWERade has traditionally focused on targeting bodybuilders and serious athletes.
However, the target demographic is now shifting to more mainstream athletes, and the
marketing mix does not reflect 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 and the newer POWERade Option.

Research
Through market research, we have discovered two key findings about this target market
that will shape a new marketing strategy for POWERade.
Our first key finding addresses what factors are important when choosing between
sports drinks. Due to its focus on serious athletes, POWERade advertising has focused
on the ingredients and benefits of its sports drink, touting itself as superior to rival
Gatorade. This is ineffective for mainstream consumers – the most important factor in
the buying decision is taste. This will come into play with promotions for POWERade.
The second key finding involves the bottled water market. Bottled water is a $9 billion
industry domestically, and expanding into this market could result in substantial financial
benefits. 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:
one aimed at the bottled water market and one at the sports drink market.

Marketing Strategy
We present a dual-pronged marketing strategy.
• POWERade will concentrate on solidifying its position in its current market and
aggressively targeting more casual athletes.
• 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
changes are needed to the POWERade formula, we propose clearly identifying the
flavor on the label of the bottle (Mountain Blast, for example, is ambiguous.) Promotions
should be restructured to focus on taste rather than ingredients.
POWERade Option. At launch, Option was positioned as a diet sports drink. Instead, we
suggest positioning it as a fitness water. By offering it at a price comparable to other
bottled waters 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 expand coverage; take advantage of POWERade distribution channels to allow
Option to permeate the market. In addition, offer below-the-line advertising programs at
health clubs to showcase Option’s added benefits.

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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, and
electrolytes drained during exercise. Up until 1990 the sports drink market had been
dominated by Pepsi’s brand Gatorade, which is still the market leader with 85% market
share. 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 still containing many of the same important nutrients.
Coca-Cola also manufactures an energy drink called POWERade Advance, but this is
not a focus of this marketing strategy.

Problem Identification
Core Market Changes. POWERade’s core demographic is shifting. When POWERade
was introduced, its primary customers were professional bodybuilders and athletes. In
recent years, however, there has been a shift and the main consumers of sports drinks
are casual athletes and those interested in overall fitness. The marketing mix does not
reflect this change.
Ineffective Advertising. Although POWERade has gained LeBron James as a
spokesperson, 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 carefully
considering the impact of our proposed marketing changes, our financial objective is to
increase 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 advertising campaign.
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, and from this we anticipate POWERade to enjoy increased revenues of $7.7-15.4
million due to natural growth.
We expect to be able to generate $45 million in revenue by tapping into the growing
bottled water 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 backed by 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 an advertising campaign targeted at the major factors involved in the buying

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

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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, it is reasonable to assume that these strong global numbers reflect the strength
of the US market. 1
The sports drinks market has been expanding in recent years. Ten years ago, sports
drinks were typically consumed by serious athletes and body builders. The target
market now includes people ranging in age from their teenage years to the 40s who
have an interest in sports. Note that these people do not necessarily play sports
regularly. There are three common 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 to accommodate 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
that females also purchase the product regularly.
The bottled water market is a $9.4 billion market (2004) increasing by 10% every year
as consumers turn away from soft drinks in favor of healthier alternatives. Water
continues to be 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. The
enhanced water market is one the fastest growing markets in the US growing from $20
million 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 brand loyalty, enhanced water is perceived as water with extra benefits
differentiating products from each other creating a strong sense of brand loyalty. As a
result of this added value enhanced water products sale for 40% more then their plain
counterparts. The typical enhanced water consumers are baby boomers who are getting
older and looking for healthy products in an effort to stay young. Traditional bottled
water drinker had an exceptional preference for fitness water resulting in Gatorade’s
Propel producing $100 million in revenue the first year 60% of the enhanced water
market. Bottled water drinkers enjoy the light flavor of enhanced water whereas they
report not liking the color or taste of traditional Gatorade 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 has Option to handle this market, although Option’s positioning is not
entirely focused on this demographic.

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

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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
regarding the 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 bottle
and 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 a redesigned 20 oz. POWERade bottle early in the year. This bottle had
functional purposes as 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 hydration and is a lower calorie alternative to the traditional formula.

Competitive Situation
The main competitor of POWERade is Gatorade. The combined market share of all
Gatorade products is 84.7% of the sports drink market. These Gatorade products
include traditional Gatorade, Gatorade Frost, Gatorade Fierce, Gatorade X Factor,
Gatorade All Star, Gatorade Ice, Gatorade Extremo, and Gatorade Endurance Formula.
The combined sales 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 has sponsorship deals with the National Football League,
National Basketball Association, Major League Baseball, Major League Soccer. It also
has a long history, being the first sports drink on the market when it was introduced in
1965. More recently Gatorade has extended their product line to include Propel Fitness
Water, which competes with POWERade Option.
Both Gatorade and POWERade come in a wide variety of flavors and the two brands
are comparable 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 sports
drinks. 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
market than sports drinks.

Distribution Situation
POWERade chooses to mainly target athletes. As such, its products are found in health
clubs, grocery stores, and to a lesser extent sports events. It has a large coverage,
enjoying 83% coverage in retail stores and 65% of convenience stores.

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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 from
supermarkets generally apply to already loyal customers.
One of the strongest distributive advantages that POWERade has is its exclusive
contract with the YMCA. The YMCA is one of the largest and most well-known chains of
health centers across the United States, and POWERade’s contract with them is a
strong benefit to awareness and market share.
The availability of POWERade Option is limited. This is something that is addressed in
the marketing plan.

SWOT Analysis
Strengths. POWERade’s strengths are that it is a product of Coca-Cola, has lower
prices than its competitors, holds celebrity endorsements, and maintains contracts with
various sports 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-
established distribution 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 LeBron James for the promotion of its products. In addition,
POWERade has contracts with many major sports organizations such as NASCAR, the
NHL, the NHRA Drag Racing Series, the Olympic Games, and many college campuses
throughout the United States.
Weaknesses. POWERade’s weaknesses include controlling only a fraction of the sports
drink 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 the market share. Also, POWERade does not have as many
deals with sports organizations as Gatorade. In addition, POWERade lacks the
scientific studies proving its effectiveness as opposed 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 the United States are increasing their awareness of what they eat and drink and are
increasing their exercise and fitness training. This yields a greater number of athletes
and hence a greater number of consumers for POWERade. With the different forms of
exercise from weight training to aerobic exercises, athletes are looking for the optimal
beverage to target their needs. With its variety of sports drinks, POWERade will be able
to supply specific beverages to target consumers. In addition, with the increase in
various sports organizations such as the X-Games, POWERade can broaden its
contracts and increase consumer awareness. Further, with the rise of young new

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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 brand
awareness due to its sponsorship contracts, and it is very similar to POWERade. Unless
POWERade can distinguish itself, it risks being labeled as a cheap clone.

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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,
we aimed to gather data regarding:
• When do consumers drink sports drinks?
• What are consumers’ purchasing habits for sports drinks?
• How do consumers compare POWERade to other brands?
• What factors are most important in choosing a sports drink?
In addition, recall that we also considered bottled water a competitor to sports drinks.
We wanted to use this survey to determine the feasibility of entering this market, as well
as any expansion potential. Most important is the following question:
• 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’s marketing 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-
suited for collecting descriptive research, which was our main goal. Due to time and
budget constraints we chose to conduct our survey over the internet. Also, we decided
to post a survey on our own web page as opposed to using a “survey website.” This
allowed us more control 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. We
estimate 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 a
whole. The main issue is that we sent surveys to people we know, who are presumably
similar 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
size of the market. Increasing the number of respondents would improve reliability, but
given the time 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
necessary data. 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.

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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 buying
decisions. The rationale is that rather than looking for the sports drink that provides the
highest 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
have immediate implications for developing a marketing strategy. There is also a lot of
useful information on attitudes towards bottled water: the most important factor for
people drinking bottled water is price (Q9) and while sports drinks tend to be bought by
the bottle, water tends to be bought by the case.

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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 is necessary to survive. This will not be a problem since there has been a
trend towards increased health awareness in recent years.
From our survey, over 70% of our target market does not consider sports drinks a
substitute for water. As such, a dual-pronged marketing strategy is necessary.
• POWERade will concentrate on solidifying its position in its current market and
aggressively targeting more casual athletes.
• POWERade Option will be marketed as a fitness water to the more mainstream
health-conscious demographic.

Target Markets
POWERade’s target market is both serious and casual athletes. The target age
demographic is between the ages of 13 and 40, keying in on those who are in college.
It is also important to target females, as sports drinks are generally considered a
masculine product and casual athletes are not as skewed in terms of gender.
POWERade Option is being positioned within the bottled water market. We expect the
greatest amount of success with consumers who drink bottled water during exercise
and those 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 and
effective ingredients. This is ineffective, from the survey results, the most important
factor when choosing a sports drink is taste, not ingredients. Hence, POWERade
should reposition itself to emphasize its wide range of flavors and their appealing tastes.
We suggest the following positioning statement: For athletic individuals, POWERade
offers the 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
alternative to 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 is important 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.

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Marketing Mix, POWERade
Price. POWERade’s price is approximately $1.25 per 20 oz. bottle when purchased
individually and about $0.83 per 20 oz. bottle when purchased in a multi-pack. These
prices are 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 prices unchanged.
Product. In order to uphold its new position focused on taste, POWERade must provide
consumers with labels identifying distinct tastes describing the flavors it sells. While
POWERade bottles clearly identify each flavor’s name, these names do not identify
what fruits 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 its trendier 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&D costs. In addition, this will prevent us from alienating athletic
customers who choose POWERade for its ingredients.
Place. POWERade currently enjoys 83% coverage in retail stores and 65% of
convenience stores. They should continue distributing through their supermarket
channel as well as large-scale retailers like Wal-Mart, but should also focus on
wholesale clubs and health and fitness clubs. Selling at health and fitness clubs, like
the YMCA, helps POWERade increase its awareness and in turn, its market share.
Further, POWERade should continue to make deals with college campuses across the
United States to key in on their target demographic markets.
Promotion. POWERade must restructure its advertising campaigns to highlight a new
position on appealing taste rather than beneficial ingredients. Television
advertisements should identify the benefits of the drink but the emphasis should be on
showing how appealing the taste of POWERade is. In addition, to attract more females
to drink POWERade, contracts should be made with female professional athletes.
POWERade sales tend to be seasonal. Since sales are lower during the winter season
when compared to the summer season, POWERade should look into offering sales
promotions 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 National
Hockey League games. POWERade already holds an exclusive contract with the NHL,
and should use the Stanley Cup Playoffs to boost consumer awareness of the product
just before the prime summer selling season.

Marketing Mix, POWERade Option

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

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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 priority should 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 in order 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 through wholesale clubs such as Sam’s Club or Costco will allow people to
purchase large quantities of the product at relatively low prices – this will help attract
price-sensitive consumers that would have normally bought bottled water because of its
lower price.
As another major distribution channel, Option should be aggressively marketed in health
clubs as this is the best place to encounter our target demographic.
Promotion. Standard advertising should be handled similarly to POWERade, although
care should 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 already has good market exposure and will focus on marketing its great
taste, POWERade Option will be billed as a great solution for those trying to lose weight
or those interested in lifetime health.
For POWERade Option, below-the-line programs are far more important. In particular,
free samples 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
people to 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 which
flavors 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
should consider dropping flavors that show weak sales in order to accommodate new
flavors. This will 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 be
implemented by the company without outside assistance.
It is of utmost importance that new television commercials are released on time (early
August 2006). This leaves only three months to complete the ads, but will increase
POWERade’s brand awareness before the National Football League season starts and
Gatorade becomes more visible. It would be ideal to start this campaign in early June
2006 to capitalize on the seasonality of the product. However, we do not recommend

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this because television commercial quality would be sacrificed and higher costs would
be incurred if the process were rushed.
Beginning the free sample promotion in October 2006 will allow adequate time to obtain
a contract with health club chains. This is the time of year that people who tend to
exercise outdoors 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 take
place one year from now, in May 2007. The details of this evaluation will be explained in
the Monitoring 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 to
examine 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 that
follow. 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 be
evaluated in May 2007. This is a completely new strategy for POWERade, so it is
advisable not 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
the positioning of Option was designed to minimize cannibalization while making
substantial gains in market share from competitors, it is recommended to do a full
analysis of the cannibalization rate.
Finally, a survey should be conducted to ensure there is no confusion among
consumers regarding the differences between traditional POWERade and Option.
These products target 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 heavily differentiate the two products.

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Appendix A: Nutritional Comparison
This 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 g
Calories per 8-oz serving 70 50
Sodium per 8-oz serving 55 mg 110mg
Potassium per 8-oz serving 30 mg 30 mg

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Appendix B: Survey
This is the marketing survey we distributed to get more information on public
perceptions about POWERade.

Marketing Survey. Thank you for agreeing to fill out our questionnaire. Please fill this
out as honestly as you can - your responses are extremely important and valuable. This
survey should not take too much time.

Again, thank you very much :)

Questions

1. When do you drink sports drinks? (check all that apply)

During/after playing sports

During/after exercising
During the course of the day
I do not drink sports drinks

2. Which sports drink do you buy most often?

Gatorade
Powerade
All sport
Another sports drink brand (please specify below)
I have no preference

Other:

3. Disregarding price and availability, which sports drink do you prefer?

Gatorade
Powerade
All sport
Another sports drink brand (please specify below)
I have no preference

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 Other:

4. What is the most important factor for you when choosing a sports drink?

Price
Taste
Ingredients
Brand Name
Availability
Other (please specify below)
I don't drink sports beverages

Other:

5. How do you buy sports drinks most often?

By the bottle
By the case
Other (please specify below)
I don't buy sports beverages

Other:

6. Do you consider sports drinks a substitute for water?

Yes
No

7. On average, how many bottles of water do you drink per day?

0
1
2
3-4
5-6

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 7-8
9 or more

8. How do you buy bottled water most often?

By the bottle
By the case
Other (please specify below)
I don't buy bottled water

Other:

9. What is the most important factor for you when choosing bottled water?

Price
Taste
Brand Name
Availability
Other (please specify below)
I don't drink bottled water

Other:

Demographics. We would greatly appreciate some basic information about yourself.

1. What is your age?

12 or under
13 to 17
18-22
23-29
30-39
40-49
50-59
60 or over

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2. What is your gender?

Male
Female

3. On average, how many hours per week do you spend exercising and/or
playing sports?

Under 30 minutes
Between 31 minutes and one hour
Over one hour to two hours
Over two hours to four hours
Over four hours to eight hours
Over eight hours to twelve hours
Over twelve hours

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Appendix C: Results
These are the results collected from the survey in Appendix A: Survey.

1. When do you drink sports drinks? (check all that apply)

36 During/after playing sports

36 During/after exercising
27 During the course of the day
37 I do not drink sports drinks

2. Which sports drink do you buy most often?

57 Gatorade
5 Powerade
0 All sport
22 I have no preference

3. Disregarding price and availability, which sports drink do you prefer?

54 Gatorade
4 Powerade
0 All sport
26 I have no preference

1 Vitamin Water

4. What is the most important factor for you when choosing a sports drink?

9 Price
45 Taste
4 Ingredients
6 Brand Name
6 Availability
15 I don't drink sports beverages

5. How do you buy sports drinks most often?

52 By the bottle
14 By the case
17 I don't buy sports beverages

6. Do you consider sports drinks a substitute for water?

24 Yes
60 No

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7. On average, how many bottles of water do you drink per day?

15 0
19 1
23 2
14 3-4
9 5-6
3 7-8
2 9 or more

8. How do you buy bottled water most often?

29 By the bottle
35 By the case
22 I don't buy bottled water

9. What is the most important factor for you when choosing bottled water?

41 Price
11 Taste
8 Brand Name
10 Availability
15 I don't drink bottled water

1 Spring vs. Purified

Demographics:

1. What is your age?

0 12 or under
0 13 to 17
54 18-22
13 23-29
4 30-39
3 40-49
11 50-59
0 60 or over

2. What is your gender?

54 Male
31 Female

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3. On average, how many hours per week do you spend exercising and/or playing
sports?

15 Under 30 minutes
8 Between 31 minutes and one hour
17 Over one hour to two hours
17 Over two hours to four hours
21 Over four hours to eight hours
4 Over eight hours to twelve hours
3 Over twelve hours

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Appendix D: Marketing Budget

Costs

Advertising
Television $12,000,000.00
LeBron James contract $2,000,000.00
Contract with female athlete $1,500,000.00
Upgrading NHL contract $1,500,000.00

Sales Promotions
Rebates $500,000.00
Free samples $1,000,000.00

Contract with Health Club $3,000,000.00

(including product distribution to
members)

Bottle Label Changes $1,500,000.00

New flavor development $2,000,000.00

Total $25,000,000.00

Increase Over 2005 Marketing Budget $1,268,000.00

Projected Revenues

Expected Revenue $254,898,770.00

2005 Revenue $169,898,770.00

Expected Revenue Increase $85,000,000.00

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Appendix E: Timeline
This is a timeline of the propsed action program for POWERade marketing.

Begin to Begin free Consider

negotiate sample expanding
contract promotion to other
with health Debut in health health club
club chain updated club chain chains
TV ads

May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May
2006 2006 2006 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007

Begin sale of Rebate Evaluate

Label upgrade sales
POWERade success of
complete (all promotion
and Option in marketing
labels include begins
health clubs campaign
flavor
description)

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