Case Analysis: Cadbury Beverages, Inc. Crush Brand ®
Case Analysis: Cadbury Beverages, Inc. Crush Brand ®
Luis Villagomez
Grand Canyon University
MKT 450
September 23, 2012
Case Analysis: Cadbury Beverages, Inc. Crush Brand ®
The carbonated soft drink production industry encompasses firms that blend various ingredients with carbonated water and also package and distribute for resale (IBIS World). With the full industry definition that Cadbury Beverages is a part of, we can effectively help the marketing team, most especially Kim Feil, Cadbury’s Senior Product Manager. In order for Kim and her marketing team to succeed, they must first characterize the carbonated soft drink industry in
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• There is seasonality to the market. The higher the temperature, the higher the sales. • Sales are dependent on the region. 54.9 gallons are accounted for East South Central states of Kentucky, Tennessee, Alabama and Mississippi. 37.1 gallons are accounted for the mountain states of Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah and Nevada. • Consumers of 25 years of age consume diet beverages. • Teenagers and younger consumers generally consumer regular soft drinks.
Changes in the ‘orange’ category during the period of 1985 to 1989 In the year 1989, 3.9% of the total industry sales were accounted for the orange flavored drinks selling a whopping 126 million cases primarily through supermarkets as the distribution channel. Based on the below pie chart, we can see the top four orange flavored brands that reign in the market mostly with the variety of regular and diet varieties that cater to a wider market in the year of 1989.
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From the period of 1985 to 1989, the overall orange flavored carbonated drinks’ sales increased from 102 million cases to 126 million. This can be accounted to the emergence of Mandarin Orange Slice and Minute Maid Orange in 1985 manufactured by PepsiCo and Coca-cola respectively. As a direct effect, the market share for both Crush and Sunkist suffered heavily. From the period of 1985 to 1989, the Crush Brand’s market share apparently declined
Australian Beverages Limited (ABL) commenced soft drink manufacturing in 1937. During the 1970s and 1980s, the company expanded its beverage portfolio by entering into other non-alcoholic beverage categories, such as fruit and milk-based drinks. Entry into the snack food market was recently undertaken in response to declining consumption of carbonated soft drinks (CSDs), the company’s traditional area of business strength. This move also enabled ABL to leverage its strong distribution capabilities to supermarkets, convenience stores and
The soft-drink industry capitalizing on creating the best product. Each product has a different taste, formula, and color to entice the consumer. It is important for the product to remain innovative in order to keep the consumers interested. The suppliers can easily differ, because they do not hold much value or put
The third-largest company in the U.S. is Dr. Pepper/ Seven Up, Inc. (DPSU) which consists of 14.7% market share. It is the most famous brands are Dr. Pepper and Seven Up among the Soft Drink Brands. It has been Squirting the market by this company since 1995. The Unit Sales Volume Squirt is $39 million to $54.6 million from the year 1990 to the year 2000.
The existing concentrate business is largely controlled by Coca-Cola Company (Coca-Cola) and PepsiCo (Pepsi), together claiming a combined 72% of the U.S. carbonated soft drink (CSD) market sales volume in 2009. Refer to Exhibit 1 for an illustration of the CSD industry value chain. For more than a century, Coca-Cola and Pepsi have maintained growth and large market shares through mastering five competitive forces, shown in Exhibit 2, that drive profitability and shape the industry structure.
e) Maintenance contracts - Maintenance costs should be included as incremental cash flows because they could change the NPV of the project if the maintenance costs are significantly different for each of the different projects.
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000, carbonated soft drink retail sales were estimated $60.3 billion, however, soft drink consumption growth has slowed in recent years. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the U.S. They are the Coca Cola Company with 44.1% market share, The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/ Seven Up, Inc. with 14.7% market share. These three companies market the top ten brands account for 73% of soft drink sales in the U.S. Dr. Pepper/ Seven Up, Inc. owns two of the top ten brands: Dr.
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten
According to Exhibit 5, from 1985-1989, Orange crushes’ market share decreased from 22% (1985) to 8% (1989), this data shows that prior to the entrance of Coca Cola’s Slice and Pepsi’s Minute Maid, Orange Crush had more of the market share which at the time, they were positioned toward groups between the ages of 13-40. Since 1985, Crush repositioned itself to target individuals between the ages of 12-17.
ÿ Cola’s represent 67% of soft drink consumption while orange flavored only accounts for 3.9%
There are more than 900 registered brand names in the US. The top 10 brands are marketed by the 3 leading US soft drinks companies which are Coca-Cola, PepsiCo and Dr. Pepper/7up. The cola flavor is the most popular of carbonated soft drinks in the US with 65.7% of the market share. The orange flavor comes in 3rd with only 3.9% of the market share. As far as market segments are concerned there are only two segments; the regular carbonated soft drink and the diet carbonated soft drink (Kerin & Peterson, 2007).
In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.
(70 visitors x 1/3) x [60 minutes / (5 minutes + 1-2 minutes + 4 minutes)]
In 1980, sales increased to $120 million and the number of buyers increased to 2.1 million. More than 26 million catalogs were
Favorable demographic trends that boosted the sales of Coke and Pepsi. The per capita consumption of carbonated soft drinks increased from 22.7 to 53 gallons over the period 1970-2000 See Exhibit 4- The sales of Coke went up from 5.5 billion $ in 1980 to 20.5 billion $ in 2000. Likewise, Pepsi has nearly quadrupled its total sales over the same period to 20.4 billion $.
Coca-Cola has been around for generations with the same iconic taste, logo and symbolism. Its brand has represented family and the memories of good times, celebrations and comfort of being with those we love. Unfortunately, the company has not made good marketing decisions in the recent past and has lost relevancy. The purpose of this essay is to assess the conditions that created Coca-Colas marketing problems, evaluate the future of healthy beverages and non-carb drink brand extensions, and provide recommendations to the management.