Gatorade’s efforts to re-brand as “G” have been a dismal failure. It seems as if the brand management staff at Gatorade consumed a few too many cold beverages while making this decision, and I’m not referring to refrigerated Gatorades.
The history of the G re-brand has its roots in 2007. Unit sales were flat in 2007 compared with 2006, after three years of double digit growth, according to market research firm Information Resources Inc (IRI). More poor results followed in 2008 despite product innovations and brand revitalization efforts (here and here). In January 2009, Gatorade started the G re-brand. The G re-brand has done nothing to improve Gatorade’s bottom line. In fact, it has harmed the bottom line.
The decision to modify a brand name should not be taken lightly. A brand name communicates the essence of the brand to consumers. According to Rick Baer, Professor of Marketing at Thunderbird School of Global Management and former Global Brand Manager with Colgate-Palmolive and Dial Corporation, a brand name “should conjure up all the associations and images you want for your brand”. Does G accomplish that? The answer is a resounding no.
What makes a good brand name? Landor Associates, a well known brand consultancy, identifies three key criteria: strategic, linguistic and legal.
Strategic criteria:
- Does it capture your brand’s essence in a meaningful way?
- Is it appropriate and appealing to your target audience?
- Is it as brief as possible?
- Does the name connect to what the business is about?
- Does it have the potential to be memorable?
- Does it limit you in any way?
Looking at the strategic criteria, the brand name Gatorade excels. It does capture the brand’s essence and connects to what the business is about. In the 1960s, University of Florida scientists developed a chemical mix that enabled the Florida Gators football team to stay hydrated and enhance athletic performance. Just over a year after the creation of Gatorade, the Gators won the Orange Bowl. The name is brief, memorable and non-limiting.
In terms of G, it doesn’t capture brand essence, it is undifferentiated, it doesn’t connect to the business, it is not memorable and it is limiting. G is so nebulous that it can be interpreted in many different ways and many of these interpretations are destructive to brand equity. Does PepsiCo want Gatorade’s G to be associated with Gangstas and the illegal drug trade? I think not.
Linguistic criteria:
- Is it appropriate in meaning in all major languages?
- Is it easy to spell and say?
- Does it limit you in any way?
- Have you considered all relevant cultural sensitivities?
- Is it too similar to an existing trademarked brand that it may cause consumer confusion?
Gatorade passes all of these linguistic criteria with flying colors. G does not. While it is easy to spell and say, it is limiting and doesn’t consider relevant cultural sensitivities with possible connotations to gang and drug trafficking subcultures. Trademark attorney Steve Baird has already pointed out many of the possible points of confusion with G.
Legal criteria:
- Can you use it without infringing on another trademark?
- Can you own and protect it as your trademark?
- Is the domain name available?
- Can you use it and protect it in all relevant geographies?
Gatorade passed all the legal criteria. G didn’t-it can’t be owned and there are potential infringement issues which Baird has documented.
Since we have seen that G fails as a quality brand name, it is a logical conclusion that Gatorade sales will slump. Existing brand data supports this conclusion.
Gatorade lost a 4.5% share of the sports-drink market and volume slipped 17.5% in the first six months of this year, according to Beverage Digest estimates. It now has about a 75% share of the sports drink market. In July, a Gatorade spokeswoman told the Wall Street Journal that sports drink volume has slipped more than 12%. This means that Gatorade underperformed in the first half of 2009 as compared to its peers in the market.
Gatorade’s slump has really dampened PepsiCo’s performance. Pepsi Americas’ beverages unit had revenue fall by 6% in the 2nd Quarter of 2009. Coca-Cola North American beverage unit only experienced a 1% drop. It is worth mentioning that Coca-Cola owns the Powerade brand, Gatorade’s main rival. Powerade volume sales increased by 23.6% in the 1st Quarter of 2009.
In a desperate attempt to revitalize sales, Gatorade called on former pitchman Michael Jordan to enhance the sagging brand. This coincided with Jordan’s entry into the Basketball Hall of Fame in September. According to Bill Sipper of Cascadia Consulting, a food and beverage consultancy, Michael Jordan wasn’t the right person to help out the brand. Sipper said “Anyone who followed Michael Jordan 30 years ago is not their prime consumer today.” Sipper also had harsh words for the G campaign as a whole. He said “It’s the worst ad campaign in 30 years. The most uncool thing is trying to be perceived as cool.” Consumer perception of G certainly reflects Sipper’s sentiments, as the aforementioned sales numbers indicate.
On October 1st, PepsiCo CEO Indra Nooyi said the company is planning a “massive Gatorade transformation” for 2010. Part of this “massive transformation” will be the introduction of new products formulated to the needs of different types of athletes, according to CFO Richard Goodman. For the sake of PepsiCo’s financial performance, all products should be branded as Gatorade and have absolutely no indication of G. Now is the time to retire the G campaign, just as Coca-Cola retired New Coke when it was obvious that New Coke was a failure. At that point, Coca-Cola underscored its history of cola excellence. In 2010 and beyond, every aspect of Gatorade’s marketing mix should emphasize Gatorade’s rich tradition of enabling athletes to achieve peak performance. This recipe should help PepsiCo’s achieve peak performance in the same manner that an athlete achieves peak performance by drinking Gatorade.