Lucozade is one of the products of
the global pharmaceutical companies, GlaxoSmithKline and it distinguishes
itself as the perfect product for people desiring a little more energy to boost
their physical activity (Schuna, 2011). Lucozade is produced in many forms
which include drinks, bars, gels, tablets, and also in powder form. This
product was originally targeted at patients who needed extra energy to get
well. However, subsequent commercialisation has been done accompanied by well
executed brand repositioning efforts that have transformed the products from
being the ‘remedy’ to the sick children, to being the product of choice to
every active individual in all ages (Manifested Marketing, 2011). The product
is especially common among the young adults.
Lucazade has been in the market
since the 1920s and has grown to be the leading brand in the energy drinks
industry (Manifested Marketing, 2011). However, the product continues to face
competition from other energy drinks produced by Coca Cola, Pepsi and other
vitamin drinks available in various national markets. This is perhaps the
reason why the company ensures vigilance in its implementation of the marketing
mix that has seen Lucozade retain its position as the leading energy drink in
the global markets.
For custom made research papers, Click Here
The components of the marketing mix
are discussed in the following sections.
The product is the good or service
that the market derives the desired benefits from. It is the basis of all
marketing efforts as it is by having it bought in the market that the
organisations justify their existence. The product refers to the features
therein and how such features help in satisfying the market needs identified
(Kotler and Lane, 2006). It also refers to the variety or product range and how
the different aspects help in consolidating the product’s strategic position.
Lucozade is specifically designed to boost the energy levels among its users
and an examination of its contents reveals this. The ingredients of the
specific products are as illustrated in Appendix I.
These products come in various
forms and this enables them to provide the desired benefits among a wide range
of consumers. For instance, many athletes would prefer to take a break to drink
their energy drinks before proceeding with their exercises. However, for those
who’d want to consume the products while exercising, the tablets and bars are
availed (Ogivly and Mather, 2011). This ensures that no needs are left
unsatisfied and it helps in consolidating the products’ positioning in the
market. The provision of the products in forms such as drinks, jelly beans,
tablets, energy bars, and energy gels is strategic and one of the reasons for
the popularity of the products in the market (Ogivly and Mather, 2011).
Product can also refer to the
packaging and labelling and how it is perceived. To make the product appear
more oriented to the boosting of energy, Lucozade changed its tag from
‘original’ to ‘energy drink’ (MMC Learning, 2011). This new label is more
reflective of its core features and therefore likely to be more effective.
For custom made research papers, Click Here
This component of the marketing mix
refers to the accessibility of the products to the target clients. Lucozade is
becoming a household name in many parts of the world with most of the retail
outlets stocking the products. The company has an active team that ensures that
the products are stocked in retail outlets such as supermarkets, hypermarkets,
shopping malls, and other outlets (GlaxoSmithKline, 2011). Health care
facilities such as pharmacies also tend to stock the products. The company also
enters into partnerships with learning institutions such as universities around
the world to stock the products in their canteens (GlaxoSmithKline, 2011). The
same applies to the leading sports clubs and recreational facilities around the
world. Lucozade is therefore quite easy to find and anyone wishing to consume
the product would not strain in their quest to find the product. Consumers do
not like having to go to extra lengths to access the product they wish to
consume and they would in most cases opt to make do with the best available
substitute (Mullin, Hardy and Sutton, 2007). Any inefficiency in the
distribution system may therefore cost the organisations a lot in terms of lost
sales. Lucozade has an efficient distribution system and this keeps their
customers satisfied with the brand.
For custom made research papers, Click Here
The price at which a product is
offered determines how it is perceived and how well it sells in the market
(Kotler and Lane, 2006). For most products, lower prices tend to help in
attracting customers. However, where the products are perceived as high value
products, the lowering of prices may actually be counterproductive. The
understanding of this aspect of the consumer psychology is crucial in ensuring
that the pricing strategy embraced leads to the generation of the desired
results. Energy drinks are high value products and those who use them would in
many cases prefer to use the products that are deemed to be of a higher quality
with price often taken as the indicator of quality (Hanrahan, 2009). Lucozade
is competitively priced at slightly higher than the market average and this
helps with the building of the image high quality in the market (The Irish
Times, 2011a). This pricing strategy has however been a source of a
disadvantage in the period immediately after the global recession where many
consumers in the market tended to go for cheaper products in response to their
diminishing purchasing power. However, as the economies continue to recover,
growth patterns are being restored.
For custom made research papers, Click Here
Promotion is also a crucial
component of the marketing process and it mainly involves the communication
about the products to the market. Markets need to be aware of the existence of
a product before they can start demanding for it. Lucozade is promoted in
various ways which range from the use of advertisements, use of promotional
campaigns and direct selling (Manifested Marketing). The advertisements are
done through the mass media such as televisions, newspapers, and magazines. Of
interest is the ‘YES’ campaign which is conducted on television. The
advertisements are also done through popular social sites on the internet in
order to be more effective among the younger generations (Hanrahan, 2009). An
example of such an initiative is the alliance between Lucozade and Spotify
which is a music-oriented site known to be quite popular with the youth
(Manifested Marketing, 2011). The use of famous personalities for endorsements
has also been quite effective. The direct marketing done by Lucozade does not
involve personal selling to the end user. The direct marketing efforts are
mostly channelled to front office personalities in the targeted organisations
to get them to recommend the products to those they interact with.
For custom made research papers, Click Here
Lucozade faces stiff competition
from other energy drinks such as Powerade by Coca Cola and Gatorade by Pepsi.
Both of these companies are global conglomerates with financial strength and
technological access to counter Lucozade quite effectively. Beside these two,
various national economies have vitaminwater and other supplement brands that
tend to have a niche within specific groups and localities (Hanrahan, 2009). A
more detailed list of competing products is listed in Appendix II. This threat
by competition has the capacity to strip lucozade of its market leadership and
lower its performance in the market.
There are however many
opportunities in the market. There is a growing culture of physical fitness
among the young adults and this only implies that that the demand for energy
drinks is set to rise. With the growing recognition of sports personalities as
icons in the society, opinions are changing favourably in favour of physical activity
with the world seemingly focused on pursuing good heath through physical
fitness (GlaxoSmithKline, 2011). The recovery in the global economy is also
expected to contribute to rising disposable incomes hence more sales are likely
to be realised.
The biggest strength that Lucozade
can use in exploiting these opportunities is its considerably strong brand
(GlaxoSmithKline, 2011). Over the years, Lucozade has distinguished itself as a
reliable player in the sports drinks industry with most customers identifying
it as one of the most reliable brands in the market. This brand strength helps
in creating and maintaining special relationships with their clients hence
enabling them inspire loyalty among their clients. The recipe for the
preparation of the energy drinks is also a source of strength where the
organisation is able to produce energy drinks with a unique taste and colour
(Manifested Marketing, 2011). This uniqueness easily gets clients accustomed
and attached to a drink in a manner that makes them prefer Lucozade to other
energy drinks.
For custom made research papers, Click Here
The macro environment refers to
environmental factors beyond the control of the organisation and they include
the political factors, economic, social and technological factors.
The political developments in the
global markets have largely been positive to businesses with governments
seemingly moving towards market economies where businesses operate without
excessive regulation (Hanharan, 2009). The wave of globalisation has also made
it easy for businesses to enter foreign markets without much hindrance.
Economically, the world economy is
recovering from the effects of the global recession and projections are that
full recovery may be realised towards 2014 (The Irish Times, 2011). The growth
of the economies also serves the organisations well as people are more likely
to afford their products with increased disposable incomes. There is however
fears regarding the debt crisis in Europe and how it may affect the world
economy with fears that an ineffective solution to the crisis would plunge the
world back into a recession. This is a threat that could adversely affect
businesses.
The social factors seem to be
favourable with more people embracing physical activity either for health
reasons or in pursuance of their careers (The Irish Times, 2011). There is a
huge awakening around the world about the economic potential of sport and this
is contributing to rising activity levels. The emerging countries such as China
are dominated by a youthful population and they present a perfect expansion
opportunity for Lucozade.
Technological advancements have
been high in contemporary times (Hanharan, 2009). This gives Lucozade the
advantage to access the needed technologies with ease. However, the same advancements
present a threat as they can be accessed by the competitors and used to come up
with substitutes that could threaten Lucozade’s position in the market.
For custom made research papers, Click Here
Having analysed the strategic
positioning of Lucozade, a few recommendations can be made on how it can grow
further in the market. To start with, the company should consider making more
intensive inroads into emerging markets and consolidate a dominant market share
there. As has been noted, the emerging markets have a youthful population who
could easily take to the consumption of the product (Hanharan, 2009). Besides,
the company has a good brand image that could help in ensuring the success of
such endeavours.
Certain competitors have a loyal
clientele who may not be easily convinced to consume a different product
irrespective of the intensiveness of a marketing campaign. This is especially
so with locally made vitaminwater brands which are deeply connected with local
populations. To expand into such markets, Lucozade should consider buying out
such competitors. Taking over of their market shares would further solidify
their market leadership and ensure superior profitability (Keegan, 2002). A
remarkable feat would be the acquisition of the sport drink brands of one of
the global conglomerates such as Pepsi or Coca Cola which already have a huge
following globally.
To ensure that they are safe from
threat of increased competition through the entry of new market players, the
company should consider creating certain allowable barriers to entry. The most
effective one would be the quick attainment of market dominance and strength of
brand that would make it difficult for a new comer to advertise their products
and make significant progress (Kotler and Lane, 2006). This can be done through
the intensification of their promotional and brand awareness exercises in the
markets already occupied.
Lucozade remains one of the
strongest brands in the sports drinks categories and it boasts of a strong
brand built after years of offering quality products to the market. Lucozade’s
position in the market remains strong despite the stiff competition. However,
this is a positioning that could be lost unless the company becomes proactive
in tackling the competition and eliminating competition where possible. Some of
the strategies that the company could use to achieve this include the
intensification of brand awareness exercises, the takeover of competitors where
possible and the consolidation of market shares in emerging markets.
For custom made research papers, Click Here
GlaxoSmithKline, 2011. GlaxoSmithKline Annual Report 2010. (Online)
Available at: http://www.gsk.com/investors/reps10/GSK-Annual-Report-2010.pdf
(Accessed 16 November 2011)
Hanrahan, W., 2009. Market Audit: Sports and Energy Drinks
Market. (Online) Available at:
http://www2.warwick.ac.uk/alumni/services/eportfolios/bsqjfb/redbull.pdf (Accessed
16 November 2011)
Keegan, W.J., 2002. Global Marketing Management. Upper Saddle River, NJ: Prentice-Hall
Kotler, P., Lane, K.K.,
2006. Marketing Management. 12th Ed. Pearson Education
Manifested Marketing, 2011. Lucozade: Continuous Market Development.
(Online) Available at: http://manifestedmarketing.com/category/branding/
(Accessed 16 November 2011)
MMC Learning, 2011. Market Positioning. (Online) Available at:
http://www.multimediamarketing.com/mkc/marketpositioning/ (Accessed 16 November
2011)
Mullin, B.J., Hardy, S., Sutton, W.A.,
2007. Sport Marketing. 3rd
ed. Champaign, IL: Human Kinetics
Ogilvy and Mather, 2011. Lucozade Sport: Longterm Effectiveness. (Online)
Available at: http://www.ogilvy.ie/documents/Lucozade_Sport_Study.pdf (Accessed
16 November 2011)
Ranchhod, A., Marandi, E. 2007. CIM
Course book 07/08 Strategic Marketing in Practice: 07/08
Edition. Oxford: Butterworth-Heinemann
Schuna, C., 2010. The Lucozade Diet. (Online) Available at:
http://www.livestrong.com/article/338977-the-lucozade-diet/ (Accessed 16
November 2011)
The Irish Times, 2011. Marketing Communication Fuelling
Performance. (Online) Available at: http://www.business2000.ie/pdf/pdf_10/glaxosmithkline_10th_ed.pdf
(Accessed 16 November 2011)
The Irish Times, 2011a. GlaxoSmithKline:Lucozade. (Online)
Available at: http://www.business2000.ie/pdf/pdf_5/glaxosmithkline_5th_ed.pdf
(Accessed 16 November 2011)
For more on management theory and case studies http://expertresearchers.blogspot.com/
For more on management theory and case studies http://expertresearchers.blogspot.com/
No comments:
Post a Comment