Gatorade Marketing Essay

At this moment, little is done in terms of promotion strategies, incorporating sales promotion efforts In the supermarkets to increase consumer awareness. The order- placing In the points of sale is actually based on a ‘push’ strategy, whereby orders for Storage are placed as Side’ orders next to the rest of PepsiCo products on the shelves of soft drinks.

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Nevertheless, opportunities for further development of the market are observed In the growing percentage of the Albanian population that has a higher disposable income and which is starting to engage in sports activities (mainly ex. soccer) as well s the constantly increasing international community of expatriates who work in Tirana, the capital, for an average tenure of three to four years. Most of these potential clients engage In sports (mainly tennis, cycling and jogging).

Evidently, even though the market for non-alcoholic sports drinks is at an Introductory phase In Albania, the strong presence of the distributor and the steady Increase of the two population segments Identified above present opportunities for a more ‘aggressive’ marketing strategy for Storage. Table of Contents 1. 0. Introduction 4 2. 0. The current marketing strategy of Storage in Albania 5 3. 0. Recommendations References 10 11 Storage was first developed In the 1 ass’s In Florida.

The medical doctors of the university of Florida noticed that the Gators’, the football players of the university, where severely dehydrated during each game and as a result they lacked the carbohydrate-electrolyte beverage that kept the players hydrated since water was not sufficient to keep them ate high energy levels. After noticing dramatic success in their teams’ record in football, players and coaches wanted Storage to be on their sidelines each and every game.

After the success in college sports, the Storage Company, currently under the Quaker Oats portfolio of PepsiCo was on the sidelines helping professional athletes such as Michael Jordan. Players from the NAB, NFG and even MASCARA have all chosen to drink Storage. Storage even took the worldwide stage by introducing the brand to China, Colombia, the Middle East, South Africa and another 75 countries.

For almost 35 years now in business, Storage keeps its main focus on professional players and amateur athletes across the globe. Storage aims at being the number one in sports drinks. On the whole, its strategy is o increase its distribution of the Storage bottle by reaching more channels, in effect increasing its base. This strategic focus seems to be the prevalent means to keep Storage at the top in terms of market share worldwide (88%).

At this moment in time, Storage’s marketing strategy is one of the ‘survival of the fittest’, I. E. Eliminating competitors (mainly Coca-Cola’s Powered) through an expansion of its reach, in terms of points of sale, and its continuous promotion of its image as the most dominant thirst quencher in the world, which is effected through the sponsoring of world famous athletes, like Michael Jordan. Source: www. Storage. Com ) 2. 0. 2. 1.

The current marketing strategy of Storage in Albania SOOT Analysts Below is an analysis of the present situation of Storage in Albania: Strengths: Highly qualified Marketing and Sales executive team: Most of the managers have master’s qualifications from US and European universities and have spent some time working abroad, most of them in fast-moving consumer goods. Storage reputation: Both as a brand name and as part of the highly respected portfolio of the local distributor, Storage cannot be defeated by any competitive product on that ground.

Knowledge of the local market and distribution: The distributor is a well-established firm and has excellent knowledge of the local market as well as a strong distribution network, mainly in Tirana. Distribution of Storage have full confidence in the advantages of their product. Added to this is the added value in the minds of local consumers that Storage has as part of PepsiCo. Healthy financial position of distributor: The distributor is a very healthy firm in terms of its financial performance, rating among the top firms in Albania for the last five years. Product variety: Storage comes in a rich variety of tastes / colors.

At the moment, though, only the blue and orange range is available in the market. Weaknesses: Pricing: Storage is a relatively expensive product for the average Albanian consumer. It is mainly addressed to the upper-end segment of the local population and the international community of expatriates. Limited sales force experience: The local sales force, despite their commitment to the product and product range, have limited experience in advanced marketing and sales promotion tactics that could be put in action, if the distributor decided to increase its market share.

Mainly, their current Job is limited to ‘order-taking rather Han engaging in consultative sales or key account management. Storage Albania currently at the introduction phase: The product has only recently entered the Albanian market in the soft drinks segment; hence it is still at the awareness phase. Opportunities: Albanian average consumer’s perception of American products as premium: The average Albanian consumer has a strong liking for anything of American origin. This creates further opportunities for Storage as its acceptance by the market will be faster.

Albanian elite and international community on the increase: There is a significant reapportion of the Albanian population that has a higher than the average disposable income – this accounts for approximately 10% of the total population of 3. 5 million (2005 census). Also, there are approximately 100,000 expatriates in Tirana, most of whom of European or American origin. The younger generation of Albanians is starting to engage in sports for leisure: The targeted age group of 18 to 28 (approximately 25% of the total population), who are studying towards degree have time to spend for leisure and are attracted by sports, like ex. soccer (males).

In most cases, they have available money to spend from the pub-group). Lack of competition: At the moment, there is no local competitive product in the Albanian market and Powered has a very small market share (approximately 5% – 2009 figures). Threats: Albanian economy: The fall in the construction activity, which has been the backbone of the economy for years, coupled with the world crisis that knocks at the door of Albania may decelerate the growth rate and the consequent growth of the upper-end incomes.

Limited Government interest in building sports centers: The Albanian Government as well as the municipality authorities has not as a priority to invest in building sports or creation centers at this moment. This may affect demand for Storage as it is largely dependent on the rise in the number of people engaging in sports. Professional sports teams running on very low budgets: Most sports teams are not sponsored by large firms; hence their budgets are limited to make the cost of consuming Storage in large quantities a luxury. 2. 2. Industry Analysis World figures place Storage at the top in sales.

It is notable that in Canada and the United States, Storage has 88% of the market, overriding Powered and All Sport (www. Octogenarian. Com ). As already mentioned, Storage is the market leader in Albania with a 90% of the market, while Powered has 5% and the rest is split among some local firms that mainly bottle spring water and have some low end thirst quenchers. At the moment, Storage is available in the standard orange and blue liquids while some of the other product ranges in its portfolio, like Storage Sports Nutrition Shake, Storage Energy Bars and Propel Fitness Water are not imported.

An analysis of Porter’s competitive forces reveals the following: 1) Rivalry among existing firms: There is no rivalry at all since Storage is a sole layer in the Albanian market. 2) Threat of substitutes: There are a number of branded ice teas that cost less and could act as thirst quenchers; however, Albanians are not used to the taste of ice tea which means that this is not a serious threat at this moment. 3) Bargaining power of consumers: This is limited since the target group of Storage does not have any other product to turn to. ) Bargaining power of suppliers: The exclusive distributor has a high bargaining power; yet it is price- conscious since Storage is relatively expensive compared to other products in this range. )Entry barriers: In essence, Powered can increase its share in the market distribution channels are not controlled by the distributor and other smaller suppliers can import and distribute competitive products without restrictions. 2. 3.

Target markets in Albania The Storage thirst quencher is initially targeted towards males belonging to the age 18 to 34, who want energy replacement after physical exercise. Storage is known to taste better than water and has no side effects. Storage in Albania has kept its identity as the energy drink of renowned professional athletes, like Michael Jordan. The rationale behind it is the affinity of Albanian people for ‘anything American’; hence all promotional campaigns aim at passing the message that Storage must be of superior quality since well known American athletes drink it.

It has to be noted that the consumer habits of this segment are very much affected by quality standards set by the American or Western European cultures. In particular, the age group in question has grown after the fall of the old communist regime; hence, they are more familiar with western type habits and are more prone to adopt free-market behaviors than their forefathers. This creates opportunities for any reduce or service whose origins are from the western world, as it is considered of superior quality and is trusted much more than local products.

As such, the Storage promotion in Albania is based on the messages mainly shown in street banners or some of the more serious leisure and sport magazines that are published in Albanian or in English for the international community. The messages show Michael Jordan or local sports heroes drinking Storage. In addition, there is some sponsoring of the athletic events taking place at the end of the school year but this is limited to the few private schools and the international community school in Tirana.

Evidently, the Storage marketing and sales team of the distributor are targeting at the Albanian elite and the international community, for two basic reasons: 1) As already stated, the Albanian elite wants to differentiate themselves from the rest of the Albanian population; hence, they are keen on consuming products that are relatively expensive for the average Albanian. In this way, they appear to be more ‘European’ or ‘American’ in comparison with the rest. 2) The growing international community consists of people who like sports and who were familiar with the product in the past. . 4. Marketing financial data Storage gross sales in 2009 amounted to a total of 6,750,000 leek, the equivalent of 500,000 Euro (1 Euro = 135 leek). Hence, the advertising and promotion budget for 2009 accounts for 20% of the total gross sales. This is quite high considering the which if deducted, leave a profit before taxes at 5% of the gross revenue. Unfortunately, the lack of access to market data from competition did not allow me to make further comparisons to see whether the marketing strategy was successful.

In my research, it was apparent that there is limited availability of statistical data of any mind in Albania and this makes forecasting and marketing planning a difficult task. The only comment that can be made with regards to the suitability of the marketing strategy is that since Storage is a new product in Albania the marketing strategy selected can be validated on the basis of a) The targeting at the Albanian elite and the international community who have higher than the average disposable income and can spend money for their leisure b) The increasing occupation of the younger generation with sports activities.

Obviously, one concern is that the critical mass identified above may be enough for a tart-up but reliance on this segment for larger sales volumes in the future is precarious. There is an apparent need for a wider reach of the product to other segments to start building a basis for a move to the growth phase of Storage’s life cycle in Albania. This is explored in the next section of this paper. 3. 0. The Albanian economy is currently experiencing growth rates above the E average, especially thanks to the boost in the construction business, the investments in IT infrastructure and the growing banking and financial services.

This is expected to increase the living standards of Albanians, especially of those involved in the above sectors for as long as this trend continues. There are risks though associated with the model of economic growth in the country that is largely dependent on external financing, Just like the Greek model of the economy that has significantly increased the external debt and drove the country to further aid from MIFF and the European Bank. If the Albanian economy does not learn from the Greek lessons, it is bound to be in the same condition perhaps ten years from now, according to local economists.

This possibility will impact on Albanians candidacy as an EX. member since EX. will be elucidate to accept the candidacy of a country with severe problems. On the contrary, if the economy of Albania is more cautious of these dangers, there is a high chance that a year from now EX. will decide to include Albania in the list of new candidates. Such a scenario will boost the economy and attract more FAD; hence, increase the number of expatriates and further advance the standard of living of a higher proportion of the local population. Racketing strategy or invest higher amounts for promotion of Storage. It appears that more awareness strategies would at the moment be more appropriate to ensure rent consumption levels are kept and more people become aware of the product. The distributor could explore strategies aiming at segments like high school pupils who are more involved in sports activities, compared to previous generations. The strategies incorporating sponsoring of local star athletes or promoting images through Michael Jordan etc should be continued to promote the brand.

In addition, because Albanians are still attracted by the idea of healthy home-made diets, it is important for the distributor to promote Storage as a product that has a healthy impact on people engaging in sports activities. This should be a dominant message in any kind of awareness strategies. The pricing strategy should involve sales promotion strategies in the points of sale, like the ones Storage is using worldwide. This should include coupons or sales discounts or opportunities for gifts like 2+1 bottles, etc.