Lucozade – Continuous Market Development

I have previously written here about Lucozade’s history: the product was originally intended for those suffering from minor illnesses; yet, through the process of finding new markets for an existing product (market development), Glaxosmithkline (GSK) have created a commercial success.  Having now positioned the Lucozade brand towards sports performance and penetrated the U.S market, GSK wants to realign the original Lucozade drink with young adults.  This strategy is very well planned; it has been augmented through segmentation, differentiation and multi-branding.

GSK’s strategy to target the younger, active consumer – rather than purely athletes – features a new slogan ‘YES’ and a new advertising campaign featuring musicians – aspirational groups – such as Tinie Tempah.  This is a stark contrast to their norm of using professional athletes.  Although I do not particularly like the new slogan and find celebrity endorsements too predictable, I believe GSK are on to a winner.

The critical element of their differentiation strategy has been segmentation.  Hence, a profitable market has been identified for urban trend-setters and for athletes.  This forms the basis for product and branding strategies to work in coordination in order to meet the demands of separate consumers – an imperative for market development.  For instance, you may have noticed that the original, fizzy Lucozade is popular among those for seeking a refreshing soft-drink.  On the other hand, athletes are much more likely to be drinking the still carbonated drinks.  These differences are due to the product’s differentiation.

The new ‘YES’ strategy, encompassing the above advertisement, will place greater emphasis on these differences.  Consequently, I believe, the multi-branding strategy of Lucozade will become even more effective.  But already the basic elements of the marketing mix have long been used to make consumers associate the different Lucozade brands with different needs.

Although it may sound obvious to point out, it is easy to forget that the original Lucozade drink to be targeted at young drinkers was re-branded as Lucozade ‘Energy’, rather than ‘Original’ a long time ago.  Where as the still variety has been branded as Lucozade ‘Sport’.  Furthermore, if we look at the place element of Lucozade Energy’s marketing mix, the product is often sold alongside other competing soft-drinks like Coca-Cola and Pepsi.  Hence, in terms of using marketing to create a competitive advantage, a differentiation strategy reflects GSK’s market position as the challenger in the soft-drink oligopoly.

However, if GSK wants Lucozade Energy to really connect with younger, trendy target segments, then using purely traditional media will be ineffective.  Therefore, GSK has formed a strategic alliance with the music-orientated, social media website Spotify.  This entails a promotion where Lucozade consumers have the chance to win premium Spotify accounts and Spotify users having the chace to win Lucozade-branded merchandise and concert tickets.

It’s very rare that I find a marketing strategy I like so much.  The only drawback/risk I can imagine is that the ‘Energy’ brand gets stuck in no-man’s land. By that I mean the drink has too much energy and mental enhancement connotations to be perceived as an enjoyable soft-drink, and therefore fail to compete with in the fizzy drink market. While at the same time, the drink is not perceived to be a concentrated source of energy, and thus fail to compete in the energy drink market – against the likes of Red Bull and Relentless.

Having said that, their multi-brand strategy provides them with flexibility to differentiate products for different markets.  Hence, they already have a energy-stimulant positioned product to fill this gap left by the repositioning of Lucozade Energy.  This is the key advantage of differentiation: Flexibility.

© Joshua Blatchford, author of Manifested Marketing, 31/03/2011

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