Swot Analysis For Lucozade Energy And Sport Drink Marketing Essay

Planning an integrated marketing communication for a company is important (Schultz, Tannenbaum & Lauterborn, 1993) because by using IMC a products and service can be helpful to understand target market segmentation and positioning (Yeshin, 1998). However, Integrated Marketing Communication is a framework that involves planning, executing, evaluating and controlling different tools of communication to effectively communicate with target audience (Kitchen, Kitchen & Pelsmacker, 2004). In addition, it involves the exploration of models of IMC planning. It intends to ensure flow of message and the use of media.

Sports Energy Drink is one of the most popular amongst the youngsters as a result of increasing interest in sports activities. Sport Energy Drink is becoming a growing industry and beverage industry tends to invest more. Manufacturing companies are also striving to use effective marketing mix for their energy drinks. This paper aims to develop an IMC plan of Lucozade Energy Drink, a well known name in the market, for specific target market.

Since IMC refers to the integration of all marketing communication tools, functions and sources available in a company, it maximizes the effect on consumers.

Introduction

Lucozade Energy is the name of the brand produced by GlaxoSmithKline [1] and there are different many other energy and sports drinks under the umbrella of Lucozade brand name (Dibb & Simkin, 2001). The Lucozade is an energy drink. It sells its brand in UK, (Gilligan & Wilson, 2003). Besides UK and USA, it is also available in other countries. In 2007, Lucozade Sport introduced a new sub-brand, Lucozade Sport with Caffeine Boost. Lucozade Sport with Caffeine Boost has 16mg of Caffeine per 100ml. Caffeine is a stimulant mostly used in a variety of sport drink and used by many sportsmen to improve both mental and physical performance. The other energy drink of Lucozade being isontonic is quickly absorbed in the bloodstream and hydrates faster than water. It contains carbohydrates that provide fuel to active muscles, preventing exhaustion and prolonging performance.

The sports drink frequently target the youngsters irrespective of gender who are involved in sports activities (Dibb & Simkin, 1994).

Step 2: SWOT Analysis for Lucozade Energy and Sport Drink

Lucozade sport energy drink brand is a UK base brand and also provide the products in other countries (Lagae, 2005). Analyzing strengths, weaknesses, opportunities and threats helps in the marketing planning, execution, and ultimate successful result (Fill, 1999).

Strengths

Selling Relationship: Lucozade has ability to attract the customers, gives immediate result and its product is based on customers’ needs, thus Lucozade has great potential to have good selling relationship in terms of attracting more and more customers, satisfying their needs and immediate provision of their required products (Kotler, Keller & Brady, 2009).

History: Lucozade is a brand and it has history even in USA (Wenner & Jackson, 2009). It has already sponsored many sports events and look forward to sponsoring the sports events in USA as well.

Basic Consumer Need: The United States of America is one of those countries where sports activities are most participated and there are numbers of customers who seek to boosting energy, gaining strength and recovery by sports drinks (Shilbury, Quick & Westerbeek, 1998), therefore, Lucozade has great advantage to utilize its strength as it offers numbers of sport energy drink.

Large and Growing Market: In 2008, the sale of sports nutrition was valued at $2.9bn (€2.4bn) in the United States, and forecasted to increase to $3.5bn (€2.9bn) by 2013.

Different Flavors and Packages: Lucozade offers number of flavors to its users such as orange, cherry, apple, and lemon, tropical and original. The choice in flavors enables the customers to enjoy their favorite flavor even in energy drink (Beech & Chadwick, 2007).

Low Costs: Lucozade charge lower price for its energy products than other products exist in America Gatorade and Powerade (Shank, 2004).

Weakness

Lack of Awareness and Knowledge: Comparatively to Powerade and Gatorade, Lucozade has little popularity and there is lack of awareness and knowledge about the Lucozade products in the USA (Jarvie, 2006).

Negative Claim: Lucozade has been offering a product with alcohol that is tarnishing the image of sport energy product.

Traditional Preservation: Lucozade process its products using traditional preservation technique; only ice cooling can preserve the drink taste, and good taste of drink can be enjoyed when drink is icy.

Narrow Range of Material: Lucozade offers sport energy drink and this gives it vulnerability in spite of the fact that there is range of flavor but there is no range of material (Schlossberg, 1996).

Opportunities:

New Packaging Materials: There is lack of focus on the packaging material in sport energy drink industry, Lucozade can make the most of this opportunity by giving eye-catching and striking packaging that can eventually helps to increase the sales by attracting more customers (Graham, Goldblatt & Neirotti, 2001).

Replace Alcoholic Drinks: The intake of Alcohol in USA is larger than any other developed country. By using good marketing strategy, target audience can be persuaded to use energy drink rather than alcoholic which is harmful for health.

Replacement of Tea and Coffee: The intake of tea and coffee is rapidly growing and they are becoming a mean of addiction in USA (Milne & McDonald, 1999). The excess use of caffeine through tea and coffee can harm the stomach and intestine, on the other hand, Lucozade energy drink can be drunk excessively without having any harm.

Threats

Existing Products: In the existence of already established sport energy products such as Gatorade and Powerade, Lucozade will threat to maintain its sale.

Ineffective Marketing Strategy: Gatorade and Powerade possess more than 65 % of the sport energy drink industry in the USA and there is threat that marketing strategy to enter or re-enter into such market can be ineffective.

Marketing Planning for Lucozade

Situation Analysis

Internal Factors:

Promotional Capabilities: Promotional capabilities of Lucozade are stronger as it has already used promotional techniques in UK. Amongst many promotional techniques TV advertising, offline marketing such as schools, gyms, cinemas and restaurants or store, and the most successful and effective marketing is sports and physical activity place.

Prior Promotional Programs: As a result of tough competition in the market, Lucozade needs to adopt American cultural trends, incorporating it in the products like in packaging, bottling and labeling.

Brand Image: Lucozade has built a brand image in UK after the efforts of decades. However, Lucozade is not very popular in US market yet it has created a brand image by its marketing strategy of sponsoring sport events in UK. Marketing planning greatly involves creation of brand image because it affects the future sale of product.

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Strengths and Weaknesses of Product or Service: Lucozade has been functional in successful marketing in UK and has ability to attract the target customers by brand strategy. Lucozade can apply strong marketing strategy and planning. On the other hand, to enter into market with no difference can be vulnerability of Lucozade products, because customers prefer the product that is effective as well as different in terms of enhanced quality and usefulness.

External Factors:

Customer Analysis: In 2002, manufacturers and developers of sport energy drink are targeting woman and kids also because only male customers do not make enough of the sale. Moreover, they intend to change the target audience in terms of age group and include older adults in their marketing segmentation. The USA market is largely successful in attracting athletic young males to regularly usage patterns.

Competitive Analysis: According to market competitive environment Gatorade is the market dominator and shares this position with Powerade’s and has higher marketing budget and price cut.

Environmental Analysis: Sports energy drinks have become an important and dynamic part of the American lifestyle with the increasing participation in sports activities. Moreover, beverage industry has now grown to $2 billion to $3 billion in 2002 in USA.

GlaxoSmithKline now plans to expand its distribution and launch its Lucozade energy drink in the US as the healthcare giant looks to expand it beyond the UK market.

Marketing Objectives

The main objectives of the marketing are to develop a consistent and stable brand position along with other brand giants like Gatorade and Powerade. Moreover, it will largely focus on increasing the awareness about the product. In the first step of awareness program, strategy will be drawn to make recognition of product by massive and latter knowledge of brand product and message.

Marketing Strategy and Program

In order to achieve above objectives, different means of promotion will be used such as media advertising, sport event sponsoring and integrated sponsorship with marketing mix.

Step 1 Target Segment

Customer Characteristics profile and Buying Situation are important to determine the marketing strategy of Lucozade. Customer characteristics explain the customers’ geographic, demographic, Socioeconomic, Psychographic characteristics. Buying situation refers to purchasing point, benefits sought, usage and awareness of products.

Characteristics of Lucozade Customers

Main Dimensions

Segmentation Variables

Breakdowns

Geographic

a)State

b)Urbanization

a) California, Texas, Alabama, North Carolina, South Carolina, New York, Washington.

b) Metropolitan, Urban

Demographic

a)Age

b)Gender

a) 10-20, 20-35

b) Male & Female

Socioeconomic

a)Income

b)Education

c)Occupation

a) $5,00-$10,00

b) High school graduates

c) student, athlete, gymnastic etc

Psychographic

a)Personality

b)Values

c)Lifestyle

a) Aggressive & ambitious

b) Achievers & Strivers

c) Athletic Activities

Buying Situation for Lucozade

Purchasing Point

Outlet

Direct

Departmental store, Supermarkets, outlets

Mail, telemarketing, catalogue

Benefits Sought

Products feature

Needs

Source of Instant Energy

Low cost, instant effect & best quality services

Usages

Usage rate

User Status

Medium & heavy

Athlete, gymnastic, sportsmen

Awareness and Intention

Product Knowledge

Aware

Behavior

Involvement

Special effort

Current Status of Lucozade

At present Lucozade is a successful sport energy drink manufacturers and distributors in UK moreover, it is going to launch its energy drink products in the United States.

Identifying Positioning Strategy: Segmentation Process

Determine Approach: Lucozade aims to launch its brands into USA sport energy drink market through strong marketing approach to attract maximum number of customers and for this purpose Lucozade determined to change its target audience and rather than only focusing on athlete and young gymnastic, Lucozade will target woman and teenagers together with male athlete.

Select and Apply Base: Initially promotion and advertising strategies can be applied on the young students at school and colleges, woman at shopping mall or stores and men at gym and other exercise activities places.

Reveal a Segment: the product will be launched for both male and female and for different age groups such as 10-20, 20-30 and 30-45.

Target Marketing Selection

Selecting a target market is one of the most basic decisions that a marketing department has to make and the future success of the products largely depend on the suitable and correct attainable target marketing.

Determine Numbers of Market to enter: the marketing strategy for Lucozade energy products two different type of population will be targeted such as men, women and sportsmen and no sportsmen. The population targeted will be from middle and upper classes who can easily afford to buy sport energy drink on regularly basis. In addition, sportsperson within organizations and out of organizations either in school, college or gym will be the most potential customer.

Target

Price

Product Place

Promotion

Organization

Determine Which Segment offered is Potential: Segments mentioned in above section are all important in terms of target audience but amongst them sportsman and sportswoman are more competent and have more potential.

Develop a Positioning Strategy

The creative strategy of Lucozade has potential to achieve the marketing segment by following the marketing planning. Moreover, it has team of creative artist and accesses all media source to accomplish the goals. Creative strategy is appropriate and meets the requirements of USA sport energy drink industry market.

At present, Lucozade has marketing experience only in UK but has researched about the essentials of USA market in terms of their market and products trends.

Lucozade energy brand needs to enter into American market and establishing its place by adopting effective marketing tools and following marketing strategies planned. Lucozade seeks a consistent and stable position in USA market and for this purpose it will have to survive in the domestic market of USA along with other market players and competitors.

The domestic market of USA is well established and competitive with two giant brands Gatorade and Powerade. Lucozade needs to gain market place in the presence of these brands.

Lucozade has been applying a successful marketing tactics in UK, it has experience of decades to make place in a market. However, USA market is new but not unknown for Lucozade.

With the growing image and sale in UK, Lucozade has earning of 40 % share in the UK market of sport energy drink. The company plans to expand it and plan to invest into other market.

Step 3: Consumer Decision Making Process

Problem Recognition: Perceiving a Need

There is a clear difference in desired state of needs and actual conditions. An effective marketing and advertising can trigger the needs of a person for the product. For an effective and efficient marketing, it is important to use integrated marketing communication which is able to stimulate the urge of customer for the products. For this purpose TV and internet advertising can be useful because it is efficient, effective and TV and internet is used by massive of the people especially in urban areas.

Information Search: Seeking Value

Internal and external source of search both are essential in seeking value of product. According to internal source, personal recalling and past experience of a product do count if the product is not recalled by a person it means that product quality is not good or not effective enough to be remembered. On the other hand, external search factor that includes personal sources and friends or family, relies on the effective marketing and easy to recognized association. For making advertising effective and easy to remember it is important that product is endorsed and related to daily lives of customers.

Alternative Evaluation: Assessing Value

Particular association related product is important in remembering and recalling a brand. It plays a vital role in assessing the value of a product and therefore product quality and its level of efficiency determines the rank in assessing the quality of product. However, it is apparently difficult to come up with such situation that makes Lucozade a product with the highest rank in the Sport energy drink, but strong and competitive marketing along with variety and true in claiming the message, Lucozade can gain a market place.

Purchase Decision

Customers purchasing decision is surely affected by the needs but it is also affected by other factors such as terms of sale, past experience buying from the seller, return policy and it all depend on a particular store or outlet. On the contrary, specific time of purchasing such as store atmosphere, time pressure, a sale, pleasant shopping experience also determines the purchasing decision of customers.

No marketing strategy can affect or change these conditions because they vary according to experience and particular time. In such circumstances, the objective of Lucozade marketing strategy can be used to make the customers focus on the product value by applying effective and proficient marketing tactics such as advertising brand sponsorship to sport event.

Post-purchase Behavior: Value in Consumption or Use

Post purchasing period is also important to determine the success of marketing strategy of a product. If a customer experience opposite of his expectation he will not intend to purchase the product in future again.

For making post-purchasing period pleasant and positive, it is critical that customers receive what he is told to receive and it can be achieved for Lucozade if product quality is according to how it is told through advertising.

Conclusion

Marketing is a vitally important factor of a business and it determines the failure and success of a business product and brand. Therefore, it should be done with conceptual planning and strategic techniques. Integrated Marketing communication, that combines the ideas and techniques of media communication, is widely applied for different product. Lucozade is sport energy drink brand and in order to launch its brands in the United States it needs to incorporate all comprehensive and integrated marketing communication techniques. This paper included all those essential elements that are important to consider when analyzing the marketing prospects for an international brand.