Pepsi Fumbles a makeover Gatorade – Lessons for product managers

I have asked many questions, more recently, about how product managers can avoid making mistakes with their products. Half of that response is to make sure you understand the basics of product management. The other half is to learn from the mistakes of others. Like the great mistake made when Pepsi tried to change his product Gatorade …

The problem with Gatorade
Pepsi Gatorade story begins in 2001 when Pepsi paid $ 13.8B to buy Quaker Oats and Gatorade is part of the agreement. Gatorade has become the second largest Pepsi beverage products in volume sales (after Pepsi!) And is the key to profits in North America for Pepsi.

Gatorade is currently approximately 75% of the sports drink market. However, this market segment is under pressure as a host of new competitors have emerged. These competitors include teas, juices, and enhanced water brands. Pepsi is responsible for part of this competition since it introduced the Propel and SoBe trademarks Lifewater.

Pepsi Big Plan
Gatorade has begun to lose market share due to increased competition – Sales are beginning to fall. Gatorade has lost 4.5% of the sports drink market and the volume has decreased by 17.5% in the first six months of the year. Clearly, something must be done.

What was Pepsi decided to rename their products in order to attract new customers. They did it by simplifying the product label to a "G". They also launched a marketing campaign complete with television, print, and online outlets that the question "What is G?". Those of you with long memories will recall that also paid a Superbowl commercial which showed that "G" was really Gatorade.

What went wrong?
Perhaps a better question is why not go wrong? After the makeover of the product, customers complained they were confused by the Gatorade "G campaign. What Pepsi had done was to replace the Gatorade product name on the bottle with a big "G" and at the same time reducing the size of the spot distinctive lightning.

It is quite clear that what Pepsi was trying to do here is to make Gatorade "cool" again. However, it is also quite clear that they have flubber above. Pepsi has done the worst thing you can do to a brand – that has confused its customers.

Concluding remarks
Indra Nooyi is the CEO of Pepsi. Unfortunately, she has been at the forefront when Pepsi has made two trips to major products: the disaster of Tropicana and Gatorade now lack. Somehow Pepsi product managers have lost touch with their customers and seem to get caught up in internal meetings where many are convinced that they know what their customers want.

Someone at the Pepsi has to take a step back and let the product rebranding madness. What has been absent from the Gatorade campaign is a real reason for the makeover. The primary audience of Gatorade remains the same – the athletes are hot. The Pepsi brand managers need to spend your time finding ways to do it again Gatorade brand is chosen at the right time. If they can, then they will once again have found great product managers that their product (s) fantastically successful.