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Devyn Reilly, Abby Majors, Meredith Levy, Giselle E. Gonzalez-Garcia, Melissa Phillips, Korinne Fuller, Cameron Williams
COM4040-101 - International Advertising
Situational Analysis: Liquid I.V.
November 14, 2022

Situational Analysis: Liquid I.V.

History of the Issue

Throughout the last few decades there have been dozens of products that hope to offer
their consumers drinks that can enhance their energy or even offer a better shot at adequate
hydration. We are all familiar with things like Gatorade or Powerade but not necessarily
everyone is aware of a new hot product within the US known as Liquid I.V. Founded in 2012 by
Brandin Cohen after realizing there was no other drink on the market that utilized oral
rehydration therapy, Liquid I.V. officially launched. What started out as a product featured in one
local Whole Foods quickly became the top selling item in the department, prompting Whole
Foods to extend the product into other stores. This growth would continue as Liquid I.V. was
voted as “Best New Product of 2016” and then featured in 20,000 stores across the country
(Unilever, 2022).

Liquid I.V. would continue to be a global success which would in turn feed into their
efforts to combat dehydration all over the world. Every year 34% of developed product is
donated both throughout the U.S. as well as to other developing countries all over the world. As
of September 2021 the brand has donated over 16 million servings worldwide. All of this success
captured the eye of Unilever and in 2020 it was reported that Unilever would be acquiring Liquid
I.V. The following statement was released about the acquisition, “We are excited to work
together with Unilever to scale the brand and amplify Liquid IV’s mission to help people
everywhere live better lives – to optimize the body, hydrate those in need, and better the planet.”

When looking at the brand it is clear the next step would be expanding the target market
to outside of the US. When looking at Europe, specifically Spain it is clear products such as
Liquid I.V. have struggled to find their footing in international markets which brings a new set of
challenges to overcome. Products like Gatorade were initially launched in the European market
in the mid 1990’s but was quickly withdrawn from the market due to initially disappointing sales.
This trend of struggling on a European market would continue as the European union would go
on to ban brominated vegetable oil, a common ingredient found within drinks such as Gatorade,
causing the product to be discontinued once again in the market (Dimitrakopoulos, 2019).
Because of this, these types of products still have not truly found a footing within the European
market though Powerade is starting to become more common with the Spanish region
specifically. There is currently no direct competitor to Liquid I.V. seen within the Spanish market
and despite these forthcomings with other products there is an opportunity for Liquid I.V. to
expand.

With Liquid I.V. 's success in the American market it is only logical that the next step
would be to expand out into international markets, particularly those found in Europe. It is clear
that the product is doing something unique that other major corporations still have not come up
with a complete counter to. With the brand now working with Unilever it is the perfect
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opportunity to take advantage of this partnership and their expertise to break out into the
European market, specifically through Spain. Spain especially has a rocky history with drinks
that would be categorized as the same type of product as Liquid I.V., but this should be seen as
an obstacle not an insurmountable challenge. Despite products like Gatorade failing to make a
lasting impact on the European market other competitors like Powerade have found some
success by shifting their marketing and advertising strategies to cater more to specific countries
rather than generalizations. With this in mind as long as Liquid I.V. puts in the time and research
to understand what consumers in Spain look for and the product has a chance at making a name
for itself internationally.

Issue Evaluation

Spain perceives sports drinks as isotonic drinks, which creates a barrier to engaging with
sports beverages and understanding what they do (Dimitrakopoulos, 2019). Spaniards are likely
to avoid products outside of their Spain market, as they score an 86 for uncertainty avoidance
(Hofstede Insights). Right now, Spain is focusing their full attention on bargaining before
buying. Due to the global pandemic of Covid-19, Spaniards are extra careful in purchasing
products at a lower price range as “ … a quarter [of them] leave their regular retailer if they find
lower prices elsewhere” (Spain: Reaching the consumer, n.d.). The market in Spain is
competitive in terms of prices, as Spaniards will buy cheap non-brand products and will be more
attracted to sales and special offers. Currently, discount stores and cheap non-brand products are
popular (Evans, 2019). Spain being price hypersensitive creates a lack of brand loyalty, meaning
it’s difficult to maintain a relationship with consumers. However, despite Spainiards constantly
switching back and forth with brands, recognized brands still perform better than unknown ones
(Spain - market entry strategy, 2019). Additionally, the times when Spaniards do splurge are
when it comes to high-quality products if they are from Spain.

These issues can affect Liquid I.V. from being introduced in Spain’s market, but there is
still room to enter. The unique issue about this is that advertisers can see what is missing in
Spain's market- which is the relationship between consumers and brands. For these companies to
maintain relationships with consumers, they are introducing customer loyalty programs. Stores
are presenting client cards and rewards to frequent customers (Spain - selling factors and
techniques, 2022). Spaniards look for a great value, both in terms of product and brand, and
having connections with them can bring them back to a company. It’s important to show them
that they are being appreciated and understood (Evans, 2019).

Having a cultural connection with Spaniards is key to strategy, “ ... consumers would
rather buy a product that looks and feels Spanish, rather than one that is American or English”
(Savannah, 2018). An example of introducing a foreign product and brand into the Spanish
market was with IKEA. IKEA wanted to market one of their mattresses, so they focused on
building a relationship with Spanish consumers by personalizing “a stay in a hotel” for their
target audience. By adding a Spanish flair to their products, advertisements and using words like
“us” and “our country” to appeal to their customers, it resulted in a successful campaign. The
campaign was then launched on television, one of Spain’s biggest media platforms. By
connecting with Spain’s culture, it can lead to meaningful brand purchasing.
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In terms of the current media mix that is used in Spain there are several different factors
that drive consumers to make purchases, or not make purchases. Spain has proven to be a
consumer-driven society as a result of unemployment and economic crisis, according to the
Grand Valley Advertising Club. (Hengtgen, J., 2021). On average, 75% of Spaniards try to look
for a bargain before purchasing something and most of them find the products that they decide to
purchase via digital advertising and public news. According to the Santander Trade Markets,
sprain embraces mobile shopping and it alone accounts for 73% of e-commerce sales in 2021
(Spain: Reaching the consumer, n.d.). Among this platform, television and radio are found to
have the strongest advertising impact with television advertising nearing 90% effective and radio
being tuned into Spanish homes every morning and night (Spain: Reaching the consumer, n.d.).
In recent years there has been a shift in the public and health and fitness is expected to show an
annual growth rate of 11.82% – creating a projected marketing volume of $118M by 2026,
according to Statistica. (Health & Fitness z- Spain, n.d.). This increased interest in health and
fitness and current theme is used in various marketing campaigns and we plan to use it to our
advantage. There is also an increased use in health and fitness apps– these apps are used to track
health, work out, and manage stress. We may be able to find a way to promote our product on
these apps as a way to replenish one’s body after an intense workout, poor hydration habits, or
even the morning after a night of drinking too much.

Target Audience Evaluation

Our primary chosen target audience are nonprofessional athletes ages 15 to 45 years old
in Spain. This age range includes consumers who workout and exercise on a frequent basis,
whether it’s daily or a few times a week. We chose this audience because of the benefits of
Liquid I.V. has for athletes and those in need of hydration, energy and many other benefits that
are provided by Liquid I.V. The average percentage of people that participate in any type of
exercise in Spain is approximately 80%. This percentage of people is who we are mainly
targeting with this campaign to help them keep up their energy while staying properly hydrated
during exercising and working out. We want athletes and our consumers to be using a better
hydration drink for them than water or Gatorade. Liquid I.V. has many benefits, other than just
hydration; including that it gets into the bloodstream faster creating more energy, benefits of
immune support and better sleep. All of these components are very important for those
frequently working out, and also providing key nutrients such as potassium, sodium and glucose.

With Liquid I.V. being most popularly advertised towards athletes currently, it was
surprising to discover that there are groups of consumers with different behaviors who purchase
their products as well. Currently, one of Liquid I.V.’s top ways to advertise is through college
athletes. In 2020, the NIL policy (which stands for name, image and likeness) was adopted by
the NCAA. It is how Division 1, 2 & 3 college athletes are able to advertise a certain product on
their social media platforms in order to receive compensation (ncsasports.org). This particular
group of Liquid I.V. consumers use the product as a nutrient and hydration income source, before
and after a game, and on and off the field.

The second most popular group of Liquid I.V. consumers are alcohol drinkers. Many
consumers part of this group describe the product as the cure to hangovers which describes their
loyalty to the product. They drink Liquid I.V. before or after a night of consuming alcoholic
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beverages by just simply mixing the hydration powder with water. By allowing for faster
hydration, the hangovers are easier to manage.

Finally, the third group of consumers found was simply anyone who felt like they were
dehydrated. The Liquid I.V. website even stated, “when you have had a strenuous day and have
not stayed properly hydrated, try having a Liquid I.V. in water to replenish your body and energy
levels” (Liquid I.V., 2022). This language is used as a way to advertise towards this third group
of consumers. Additionally, this group does not drink the product too often, but tends to always
count on it when they feel dehydrated. With Liquid I.V. providing the main purpose to hydrate its
consumers bodies, it is easy to say that their audience's behaviors can range from a wide scale.
However, we believe that the main audience in Spain would align most closely with the first
group; hence why our target audience for the expansion into the Spanish market includes active,
nonprofessional athletes.

Out of the 8 services of the VALS profiles, Thinkers aligns best with Liquid I.V. 's target
audience based on their ideals and life perspectives. Thinkers are described to look for value,
durability, motivation, and most importantly, are health conscious. Additionally, Thinkers value
knowledge and creativity. All of these qualities of a Thinker line up perfectly for Liquid I.V.’s
customers.

SWOT Analysis

Strengths:
● Unique Features: Liquid I.V. utilizes Cellular Transport Technology (CTT) to enhance
rapid absorption of water and other key nutrients into the bloodstream (liquidiv.com).
This kind of technology is seen as a strength, because it offers hydration in an innovative
way that competitors cannot match.
● Multiple Options: Liquid I.V. offers multiple products that target different health
concerns; including hydration support, immune support, energy multiplier, probiotic
kombucha and sleep (liquid-iv.com). Additionally, Liquid I.V. offers a plethora of flavors
for consumers to choose from, including: lemon lime, tropical punch, tangerine,
pineapple, green apple, pina colada, etc. (liquid-iv.com). This is a strength because Liquid
I.V. offers a wide range of products that consumers are able to choose from, which
expands our consumer base greatly.
Weaknesses:
● Expense: Liquid IV is more expensive than water, averaging $1.53 per packet if bought
in a 16-pack bundle. This is considered a weakness because many people would prefer to
save money and just drink the water without paying extra for the Liquid I.V. benefits.
● Limited Market: Currently, Liquid I.V. doesn’t ship internationally; it only ships within
the United States (Derrig, 2022). This is considered a weakness because it means we will
have to expand our reach to ensure that consumers are able to get Liquid I.V. at their
doorsteps abroad.
Opportunities:
● Global Market: Liquid I.V. was recently acquired by Unilever, a British multinational
consumer goods company with headquarters in London, England (Unilever, 2022).
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Unilever had over $50 billion in revenue (2021), which gives Liquid I.V. an advantage
and opportunity for growth and expansion into the international market, without the risk
associated with smaller and more localized companies.
Threats:
● International Regulations: European organizations such as The European Food Safety
Authority and others have the ability to block or ban certain kinds of food/drink within
their countries (Wilson, 2022). Although Liquid I.V. is safe for consumers, this is
considered a threat because if an ingredient of a Liquid I.V. product gets banned in
Europe, it could threaten chances of expansion.
● Competition: There are multiple competing companies to Liquid I.V. with similar
products such as Hydrant, Waterboy, Gatorade, Pedialyte. Competition in the
international market means we need to capitalize on strategy and focus on what sets
Liquid I.V. apart.

Implications & Analysis

Ultimately, Liquid I.V. sits in a competitive spot for expansion into the international
market. Given its unique features and various product options, coupled with Unilever’s recent
acquisition, there is no better time for growth. Despite intense competition and international
regulation, Liquid I.V. products are set apart by their unique capabilities and the company has the
ability to sustain expansion and longevity in foreign markets.
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References:

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Derrig, A. (2022, April 29). Liquid IV: Is it worth the hype? SI Showcase - Sports Illustrated.
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Dimitrakopoulos, Y. (2019, October 17). Gatorade and the European market. Linkedin.
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