Gatorade, the well known brand of sports drink beverages, holds a large percentage of the market share for the sports drink market. PowerAde, its main competitor, does not come close to the numbers put up by Gatorade; this is also mimicked by the large number of Gatorade’s celebrity athlete endorsements compared to the 1 major endorser of PowerAde. I found, through analyzing Gatorade’s sales numbers and examining the relationship between its celebrity athlete endorsers, that these endorsements have a direct effect on the success of the sales of Gatorade. Comparing these facts and endorsements with those of PowerAde helps to determine if the advertising idea of using celebrity athletes is beneficial to not only Gatorade, but to other companies looking for ways to advertise their product.
The Effect of Celebrity Endorsements on the Sales of Gatorade
Gatorade, the popular sports drink created specifically for athletes, is seemingly everywhere. From commercials, to gas stations, to the sports coolers sitting at the end of benches in professional and prep sports, Gatorade seems to have a lock on the sports drink market. A major source of advertisings for the sports drink is through the use of celebrity endorsements; Gatorade signs contracts with these celebrities, and they, in turn, promote the product. While it seems that the company dominates the market, the numbers must be analyzed to see if the presence of celebrity athlete endorsements (and the large sum contracts that come with them) really has a positive effect on the sales of Gatorade.
Methodology
To get the proper information to see the effects of celebrity endorsements on Gatorade, various sources were used. Market Share Reporter (found in the Steelcase Library) was used to find market share percentages. The official websites for Gatorade, as well as the official webpage for Gatorade’s leading competitor, PowerAde, were used to obtain the list of celebrity athlete endorsers for each product/company. After finding the list of athletes, Wikipedia was used to find information on the various athletes, including accolades, championships, and other endorsements. The online library from the official Grand Valley State University website was used, but predominately for access to the various databases given through student status. InfoTrac as well as LexisNexus, were unsuccessfully used in an attempt to find a list of the world’s most popular athletes that could be compared to the celebrities used by the companies. The InfoTrac database was helpful in finding articles covering the sports drink market in general, with the search “Gatorade AND Sales” bringing up multiple useful articles. These articles were used to have a general understand of the market.
According to the numbers obtained from Market Share Reporter, Gatorade holds the majority of the sports drink market. The sports drink market is huge, generating 3.1 Billion dollars in revenue during 2004 (Rodwan). Gatorade holds approximately a combined 81% of the U.S. market share through its different versions, which include Gatorade, Gatorade Frost, Gatorade Fierce, and Gatorade Ice, as well as multiple others who, unlike the previously mentioned, hold less than 5% of the market share on their own (Lazich 2006). PowerAde, its main competitor, holds approximately 12.73% of the market share (Lazich 2006). Additionally, worldwide, Gatorade is the leading sports drink manufacturer with 42% of the global market, 34.1% more than PowerAde, its nearest competitor (Lazich 2006).
The list of Gatorade’s celebrity endorsements is large and covers a wide range. While including sports icons such as Michael Jordan, Diana Taurasi, Misty May and Kerri Walsh, Mia Hamm, Derek Jeter, Jennie finch, Eli Manning, Peyton Manning, Dwayne Wade, Kevin Garnet, Yao Ming, and Vince Carter, Gatorade is also affiliated with the AVP (Pro Volleyball), NCAA Collegiate sports, the National Basketball Association, the Women’s National Basketball Association, the National Football League, the National Hockey League, and the MLS (Pro Soccer), as well as the US Soccer and Basketball teams. PowerAde, Gatorade’s competitor, has a celebrity endorsement from LeBron James, and is affiliated with the Australian Football League, the US Olympic team, and FIFA (International Soccer).
Discussion
While I couldn’t find any articles that specifically addressed the effects of celebrity endorsements on Gatorade, the information I did find can be analyzed together and used to come to a conclusion. While PowerAde’s endorsement (LeBron James) features one of the NBA’s best players, Gatorade’s list of athlete endorsements includes championship winning players (Dwyane Wade, Michael Jordan, Derek Jeter), as well as Olympic Medalists (Misty May and Kerri Walsh, Mia Hamm, Jennie Finch) and MVP’s (Michael Jordan, Peyton Manning) (Wikipedia). These athletes are recognizable to those who know of famous athletes, but Gatorade’s celebrity athletes also include those that are only known by those who are very into sports, such as Eli Manning, Yao Ming, Diana Taurasi and Vince Carter (Wikipedia).
When you consider Gatorade’s sales to those of a PowerAde’s, it becomes obvious that celebrity and league endorsements play a large factor; sports fans go to games, watch games on TV, and are influenced by the athletes and leagues that they love. A company simply does not hold 81% of the US market share by chance; they may have a good product, but it’s all in the marketing. Gatorade plays to its market by using the athletes associated with that market, and connecting itself with the leagues that those in it’s market watch and follow. It is not a coincidence that Gatorade’s large number of celebrity endorsements coincides with its large number of market share.
I ran across many issues while doing research on the effect of celebrity endorsements on Gatorade’s sales. While the time allotted was more than enough, most articles featuring Gatorade spoke only of their massive amount of market share; when a company holds that much of a market, that becomes the main topic, not how they go about obtaining that large amount. Therefore, I found that any article that actually spoke of the celebrity endorsements was incredibly elusive. I also found that while I’ve heard of a list of famous celebrities on ESPN and CNN, and heard of the list of highest jersey sales, I struggled to find information like that without the proper resources. Apparently, Google, Databases and Wikipedia were not the proper resources to find said information. This information would be helpful in furthering research into the massive success of Gatorade and in obtaining extra information to solidify the size of the effect of celebrity athlete endorsements on sales. While no direct connection was found (such as a survey asking Gatorade drinkers who their favorite athletes are and comparing that data to the list of Gatorade endorsements), it can be said, from the information, that Gatorade’s market share is directly and positively affected by celebrity athlete endorsements.
Gatorade. Retrieved November 9th, 2006, from Gatorade Website: www.gatorade.com
Lazich, Robert S. (Ed.). (2006). Market Share Reporter. Farmington hills, MI: Thomson
Gale.
PowerAde. Retrieved November 9th, 2006 from PowerAde Website: www.powerade.com
Rodwan, John G., Jr. “A billion-gallon category: Gatorade continues to dominate
growing sports beverage category.(CONVENIENCECONSUMER: SPORTS BEVERAGES).” National Petroleum News 97.7 (July 2005): 14(1). General Business File ASAP. Thomson Gale. Grand Valley State University. 13 Nov. 2006
Wikipedia. Retrieved November 10, 2006, from Wikipedia Web site: www.wikipedia.org
