THE 2012 CASSIES G Series Launch

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1 THE 2012 CASSIES G Series Launch Section I Basic Information - Cassies 2012 Case Name: G Series Launch Client Name: PepsiCo Canada Agency Name: TBWA\Toronto Category Entered: Off to a Good Start / Best Launch Case Period: Business Results Period BRP in consecutive months: April 1, 2011 June 1, 2012 Start of Advertising/Communication Effort: April 4, 2011 Base Period as a benchmark: N/A New Product Launch Geographic Area Covered: Canada Annual Budget Range: Under $500,000 $500K - $1 million $3 - $4 million $4 - $5 million Over $5 million $1 - $2 million $2 - $3 million

2 SECTION II - SITUATION ANALYSIS a. Overall Assessment In 1965 Gatorade created the sports drink category. After 40 years of flavor & pack innovation, and increasingly fierce price-based competition, Gatorade had to evolve. But remaining a category leader would require true innovation. Based on years of athlete knowledge and scientific research, the G Series was launched consisting of products intended for before (Gatorade Prime ), during (the Original Gatorade Perform ), and after (Gatorade Recover ) athletic activity. The category that the Gatorade portfolio had once relied upon entirely had been expanded. The brand could no longer be just about sports drinks it was embarking on a plan to reframe itself as a leader in sports nutrition, a $4.6B market globally. This vision was bold but ownable. After all, Gatorade knew the needs of athletic bodies better than anyone. As the new G Series prepared to launch in Canada, the Gatorade business team was faced with a stark commercial reality: How to drive a new path to growth while the brandʼs most serious competitor, Powerade, was aggressively cutting prices. This case describes the launch of the G Series (from April 2011 to June 2012) and demonstrates how advertising can help a belief brand build a new ritual among consumers. b. Resulting Business Objectives The business objectives were three fold: grow revenue by 7%; increase profitability by 3%; grow dollars spend per buyer. In order to realize this, the following marketing objectives were established for the G Series first year in market: 1. Announce and generate active awareness of the G Series system. 2. Encourage trial of the Gatorade Prime and Gatorade Recover products. 3. Provide athletes with nutritional and performance reasons for using all three products (exceed norms for ad persuasion metrics). 4. Establish the G Series as a legitimate player in the Canadian sports nutrition market.

3 SECTION III - STRATEGIC THINKING a. Analysis and Insight Competitive athletes are the kind of individuals who commit to being the best at what they do and possess the intrinsic motivation necessary to push harder every day. Every rep in the gym, stride on the ice, or sprint on the field is in an effort to better themselves and gain an inch on the competition. Gatorade had long been the hydration solution for these athletes during intense activity but was never thought of outside this occasion. It was time to change that. Over time competitive athletes learn the importance of areas that extend beyond the game. First comes practice and then comes training. By the time these athletes are in their early teenage years they feel they are operating at 100% of their potential. But most of the time that is simply not the case. To reach your true athletic potential you need to combine proper training with proper nutrition. The saying, You get out what you put in had to be given a new meaning. The athlete we were speaking to put very little emphasis on nutrition and lacked understanding of the different needs the body has before, during and after exercise. As such, effective communication of the occasions (before/during/after) and the three-part product message was essential. The core of the insight was to position sports nutrition, and specifically the G Series, as a legitimate means to improve performance. b. Communication Strategy Gatoradeʼs communication target is comprised of two distinct parts; the core athlete and their shopper parents. This is a tricky target to get right and one of the reasons Georges St-Pierre and Sidney Crosby were selected as the brand spokesmen. Their ability to speak to both the athlete and the shopper was key to achieving universal understanding of this new product line. The challenge with a dominant brand spokesman like GSP or Crosby is how to deliver product information. Great athletes donʼt always make great pitchmen and asking them to speak like a salesman undermines their athletic endorsement. However, if you donʼt focus on the product, the athleteʼs personal celebrity can overwhelm any information youʼre trying to communicate. Therefore, the use of the product had to be shown in a way that was truly authentic to the athleteʼs routine.

4 The following phased approach was taken to launch the G Series in Canada: 1. Seeding (Pre-Launch) connect with the athleteʼs support group (ie. Coaches, Trainers, Athletic Therapists) to start the nutrition conversation 2. Launch Part 1 Introduce the G Series and establish before, during and after as three distinct athletic occasions 3. Visibility activate around cultural sports events relating to our athletes 4. Launch Part 2 communicate why each of the occasions are unique to the body and how the G Series benefits athletes SECTION IV KEY EXECUTIONAL ELEMENTS a. Media Used 1. Television 2. Online Pre-Roll 3. Unique Online Content (videos/facebook applications) 4. Online Banners 5. Grassroots Activations b. Creative Discussion Throughout the campaign the creative idea involved a visual reinforcement of the three-part G Series that integrated the two starsʼ training and playing routines, using them to demonstrate rather than describe - the product benefits. For the first time ever, Canadians would get a glimpse into the effort level and commitment of Canadaʼs top athletes. Seeding (2010) In August 2010, we announced the G Series to Canadaʼs top athleteʼs and their influencer groups. Specifically, Georges St-Pierre (UFC), athletic trainers and nutritionists joined us in sharing this new vision with Canada. Although product would not hit the shelves until April the transformation into a sports nutrition innovator was well underway.

5 G Series Symposium August 12, 2010 The event in Toronto included a CATA (Canadian Athletic Therapists Association) certification course which gave many self employed therapists the opportunity to earn a credit towards their accreditation put on by the GSSI (Gatorade Sports and Science Institute). The audience was able to interact with a panel discussion regarding appropriate nutrition habits for athletes before, during and after training or competition. For those looking to see the effects of proper nutrition first-hand we tested some of Canadaʼs top athletes in our performance lab.

6 Launch Part 1 (April, 2011) Recognizing that athletes donʼt think far beyond the moment, we decided to speak about the G Series in a way that had the potential to be part of their routine before, during and after. It was our job to make it apparent that these were three very distinct moments in time for an athlete. GSP Before/During/After :30 Television Spot refer to file GSP_BEFOREDURINGAFTER_30 A 30 second television spot was launched featuring GSP going through his standard routine at his famous TriStar Gym in Montreal. The speed of the visuals and the track were finished in a way that displayed the intensity of GSPʼs training and nutrition. Visibility (2011/2012) As a truly essential piece of our athleteʼs equipment, we have always approached sponsorship of the worlds greatest athletes like a partnership. G Series is not just a logo our athletes wear, but rather a part of what fuels them. GSP Inverted Push Up :30 refer to file GSP_InvertedPushUp_30

7 On January 2 nd, 2011 it was announced that GSP would be fighting in the UFC 129 event, the first ever UFC event to be held in Toronto. Leading up to the fight original online GSP content was created which linked directly to the G Series. The video showcased GSPʼs unparalleled athleticism when what seemed like a standard pull up turned out to be an inverted push up; a move that very few MMA fighters could pull off. FACE GSP Facebook App From online wallpapers to network produced content, GSP and the G Series were the face of the SportsNet network leading up to the UFC 129 fight. A Facebook app was also created on the Gatorade Canada page, which allowed fans to upload a picture and virtually place themselves in a headlock with GSP. From there they would be given the opportunity to share or export their image to be used as their display picture.

8 Welcome Back Sidney Twitter Banner On New Yearʼs Day 2011, Sidney Crosbyʼs season took a turn for the worst. Following a record 25 game point streak, the NHLʼs leading scorer was blindsided with a massive hit. After almost a full calendar year without playing we knew that something had to be done to welcome him back to the game as Canadianʼs watched from around the world. Instead of running a print ad or static banner to welcome Sidney back we decided to give control to the millions of fans and have each welcome him back in their own way. On November 21st, the date of Sidneyʼs return, we launched a live twitter banner on Canadaʼs top two hockey sites (TSN.ca & NHL.com), which allowed fans to send their own personal welcome back message to Sidney and view it in real time. In the end, Sidney thanked his fans in the only way he knew how; with two goals and two assists. Launch Part 2 (January, 2012) Although establishing before, during and after as unique athletic occasions among millennials was a step in the right direction, there was still a knowledge gap that existed. We needed to explain why these occasions were unique and why the G Series was effective.

9 Sidney Crosby Split Screen :30 Television Spot refer to file Sidney_SplitScreen_30 During the NHL All-Star game in January, 2012 a :30 second television spot was launched in conventional and sports specialty media featuring Sidney Crosby. Visually, a split screen was used to show all of the nutrition and training (top half) that went into scoring one game-winning goal (bottom half). The message was simple; athletic improvement is a combination of proper training, proper nutrition and of course, effort. For the first time ever athleteʼs would be able to see what goes into making Sidney so dominant on the ice. Sidney Crosby Why :30 Television Spot refer to file Sidney_Why_30 In April, 2012 a final :30 television spot was launched depicting Sidney Crosby going through one day of training. Viewers saw all of the grueling moments that go on behind the scenes for an NHL all-star. The G Series messaging all related back to the concept of ʻstrongʼ and the product benefits; energy, hydration and protein. Not only were the occasions unique but they also contained a new form of significance. c. Media Discussion As a sports brand trying to reach athletes and their support system (including parents) our strategy needed to rely heavily on television media. Using a building blocks approach we were able to maximize reach, frequency and most importantly, relevancy of our messaging. To activate against this strategy we sought out the following programming to introduce the G Series : Sports programming delivering base level awareness and maximizing relevancy among athletes A18-34 relevant programming extending reach and frequency High profile programming Capitalizing on large audiences

10 Across the time period the campaign had a total budget of $4.42 million -- Phase 1 of the campaign ran from the beginning of April until July 2011 and Phase 2 activating between January and June In total there were 2,165 GRPs of television behind the G Series launch in Canada. Although broadcast media accounted for the vast majority of the paid media spend, digital campaigns and grassroots initiatives ran throughout the year to bring life and authenticity to what was being shown on television. Television was the ideal medium to efficiently reach both parts of our audience in large numbers and in relevant sporting contexts. This would be our emotional stimulus, which would then drive consumers online to gain information on the science behind the G Series and how it enhances performance. Online was the perfect venue to educate as media habits indicated that this was the area where millennials spent most of their time. SECTION V - BUSINESS RESULTS The launch has been a success against all business objectives. As of June 2012 (YTD): Total profit dollar sales increased +20.5%, exceeding objectives Revenue increased by 13.3%, exceeding objectives Gatorade dollar sales per buyer increased by 9.5% during a period when Powerade reduced its average shelf price by 12.7%

11 Overall dollar volume sales of the G Series has been increasing/steady since launch amidst severe price based competition. Average dollar volume percent change for Original Gatorade Perform over business results period +5.18% 3 business periods (out of 16) yielded a negative dollar volume percent change versus prior year for Original Gatorade Perform o G Series has not cannibalized the base business

12 The G Series system has developed a strong presence in the sports nutrition category while being adopted into the routine of more and more athletes around the country. Sales of Gatorade Prime and Gatorade Recover variants have grown to a $6 million business G Series is now the number 7 player in sports nutrition (4.7 share), equivalent to 20% of Poweradeʼs business in convenience and gas Gatorade Prime and Gatorade Recover SKUʼs account for 4 out of the top 7 fastest turning products in sports nutrition SECTION VI - CAUSE & EFFECT BETWEEN ADVERTISING AND RESULTS a. General Discussion Paid, earned and owned advertising media has been proven to be effective in driving the growth of the G Series brand. Dollar volume data concludes that over 66.2% of sales were driven during periods media was in cycle (62.5% of BRP), including only paid media.

13 Athletes are showing a greater awareness and understanding of the G Series system. This directly drove continued trial and usage of the G Series system making the above gains in sales and profitability possible. At campaign launch aided ad recall for GSP Before/During/After :30 (Source: itrac 2011 Q3-Q4 Hydration Felx) achieved 30% Post advertising evaluation (Source: Millward Brown 2012 Q1 Brand Health Study) reported that 90% of the sample believed the Sidney Crosby Why :30 presented persuasive new information about Gatorade Prime, Perform and Recover - 40 points above industry norm (top percentile) Among millenials (Source: Millward Brown 2012 Q1 Brand Health Study): o 86% are aware of the G Series o 70% have tried the G Series o 12% indicated G Series is the brand they drink most often o 34% of those aware of the G Series learned about it through television advertising o Of those who have tried the products, 69% have incorporated Gatorade Prime in their routine and 87% have incorporated Gatorade Recover in their routine b. Excluding Other Factors Spending Levels: Spending levels on G Series during the first fiscal year (April 2011 December 2011) were lower due to the support of multiple product lines (G Series & G2). Media spend on G Series in 2011 was $1.84 million whereas media spend in 2012 was $2.58 million. Pricing: In 2012 commodity prices required a 7% price increase. During this same time period Powerade reduced its average shelf price by 12.7% and sold over 50% of its volume on deal. Distribution Changes: N/A Unusual Promotional Activity: N/A Other Potential Causes: As a beverage the key external factor that affects our business is weather. Sales can fluctuate by a certain amount depending on the weather experienced in the key markets across Canada. In 2012, the market also saw Private Label brands introduce value-priced sports drinks that also affected Gatorade market share.

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