The development of an export market Assignment Example | Topics and Well Written Essays - 2750 words

The development of an export market - Assignment Example The emphasis on the sports benefits of the drinks, as an improvement to water and as an aid to intense sports activities that is able to provide adequate hydration and nutrition even to the most demanding and most gifted athletes. It is worth noting that as a product range, the Lucozade brand benefits from insights and inputs from hard core research undertaken on behalf of the brand by universities, sports coaches, practitioners, and nutritionists, under the so-called Lucozade Sports Science Academy. Moreover, the brand is well-known for its marketing tag line, which is about replacing the lost energy from intense physical activities making use of Lucozade. That said, officially the classification is that of Lucozade being a soft drink brand (Answers Corporation 2013; GlaxoSmithKline Group of Companies 2013). In the United States, which is the chosen export market, key competitors in the segment of sports hydration drinks where Lucozade is bound to compete includes Gatorade and Power ade, with the former being the heavyweight brand with the greatest mind share and market share not only in the United States but in many parts of the world, and with the latter being the key competitor brand offered by Coca Cola (Carpenter 2000; Howard 2008; Competitor Group 2013). It is worth noting that those three brands mentioned above remain dominant in the world when it comes to sports drinks, with Lucozade in particular being the most dominant brand in the United Kingdom in terms of both value sales and sales by volume. Annual sales for Lucozade is estimated at 260 million British pounds. Its presence in other markets, on the other hand, is hampered by strong competition from Gatorade and Powerade, even as the overall market for sports drinks is forecasted to reach US 55 billion dollars by 2018, indicating a large opportunity for Lucozade to get a substantial piece of that pie from exporting activities. The US being a large and lucrative market for sports drinks, this export development plant for that export market has potentially great value for the brand and for GlaxoSmithKline. Other statistics meanwhile bolster the case for exports as a lucrative activity given that there is a relatively low penetration level for sports drinks in general, at just 50 percent, even as the segment grew by 64 percent for the five-year period from 2007 all the way to 2012. By product category, all three categories, hypotonic, isotonic and hypertonic drinks experienced sustained growth in volumes and dollar value over that given period, with prospects for growth also promising moving forward to 2018 and beyond (Companies and Markets 2013). In the US, moreover, Gatorade and Powerade together account for virtually the entire market for sports drinks with Gatorade owning 69 percent of the market, and Powerade owning 30 percent of the market. Both companies spend heavily on advertising and marketing activities centered on getting star athletes to endorse the brands and produc ts. The trend towards a sustained growth in the sports drink sector is confirmed in the long term, in contrast to the general decline in soda consumption in the United States over the past several decades (Daily Mail Reporter 2013). Other estimates put the market share of Gatorade at an even larger percentage, 75 percent, with Powerade taking 20 percent and the rest of the players in the sports drink market taking up the remaining 5 percent, reflecting the overall dominance of