Comparison Between Fixed Cost And Dr. Pepper-Snapple Group

Snapple is positioned as a premium brand. The premium product that is “available to anyone”. Being so in 1993, the price is still remains a luxury. With the purchase of Snapple, Cadbury became a leader in non-carbonated premium New Age beverage. (Plus, as was discussed during the lecture, a product can’t set the price smaller than the whole company, so there is no way that Snapple will have not a premium price being a part of Cadbury).

* Overall, despite the drop in price earnings ratio, Pepsi has increased the value of its stock. By increasing investor incentives and demand, Pepsi can also regain positive numbers in its future price earnings ratios

Once Quakers took control of snapple they made many mistakes that caused Snapples value to decrease by $1.4B. A lot of these mistakes can be contributed to the fact that they tried to use identical 4 P methods for Snapple and Gatorade. Quakers belived since these methods worked so greatly for Gatordade that they would also work for snapple. In terms of product and price they tried to introduce snapple in a bigger size. Quakers tried to get consumers to buy the more profitable size of Snapple which was 32 and 64 ounces. They believed since these sizes worked so well for gatorade they would also work for Snapple. However, Quakers didn’t take into account that people drink Gatorade when they are extremely thirsty from things such as exercise so they need

1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007?

A variable cost is a corporate expense that varies with production output. Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases (Variable Cost, n.d.); in the case study for all cost per event such

If one has to analyze the profitability scheme of Red Bull Energy Drink, perhaps it can be safely said that it is in a very uncompromising situation. First and foremost, the stiff competition have paved the way for the emergence of many small time players (Helm 2005). With every bottled drink that aims to steal the limelight nowadays, Red Bull should capitalize more on its creativity and ingenuity—this is of course, in relation to advertising and marketing. The company should never disregard that Coca Cola and Pepsi are still top competitors (Helm 2005). More so, even if the two share equally different components as with Red Bull, still, it is evident that the two continue to partake into the market share. Meanwhile, the notion that energy drinks offers no variety in taste is an important marketing aspect that the company should take into full consideration (Laing 2005). In 2001, Pepsi had already released AMP Energy Drink (“Amp Energy Drink” n.d). It is the company’s maidens venture into the energy drink arena. Evidently, AMP’s raison d’ etre is to capitalize on Mountain Dew’s established image. The concept would be to introduce something new, yet very familiar (“Amp Energy Drink” n.d).

A slow growing market is a great way to characterize the energy beverage category in late 2007. This industry was increasing in profits still but was not increasing in profits as quickly due to factors such as market maturity, increasing in prices, competition and new hybrid products (Kerin & Peterson, 2010). The market was still very small but was dominated by Red Bull due to it being one of the first energy drinks, which caused it to dictate the market and have more of an advantage than the other energy beverages. So in late 2007 the market for energy drinks was still

_1. HOW WOULD YOU CHARACTERIZE THE ENERGY BEVERAGE CATEGORY, COMPETITORS, CHANNELS, AND DPSG'S CATEGORY PARTICIPATION IN LATE 2007?_

By 1990s Snapple emerged as a nationally recognized brand.. With the combination of a unique product and package design and colorful advertising the company achieved nationally recognized brand. Later Snapple went through several management system and owners.

All the costs by a company can be broken into two categories, fixed costs and variable costs. Costs that are independent of output are called fixed costs. Fixed costs remain constant throughout the relevant range and are usually considered sunk for the relevant range. Buildings and machinery are included inputs that cannot be adjusted in the short term. They are only fixed in relation to the quantity of production for a certain time period. The cost of all inputs is variable, in the long run.

In the ever changing world of customer needs and expectations Dr Pepper-Snapple was faced with an increased customer focus on energy drinks. This area, when exploited correctly, is a high growth and high margin beverage business. In early September 2007, Andrew Baker had his marching orders. He emerged out a long discussion about entering the energy drink business and off he went.

Quaker wanted to expand their footprint in the beverage industry and add Snapple to create the most innovative distribution system in the industry. They expected the following benefits:

Other key marketing mix failures that affected Snapple in the Quaker era fall under the promotion and product umbrellas. Quaker did not follow regular advertising schedules, ceased Snapple’s partnership with Wendy Kaufman, and beside reducing the numbers of flavors available, was also unable to introduce new ones quickly enough. The started selling the product in larger sizes (32 and 64 ounces bottle), but this initiative was another flop: bottles of that size were suitable for Gatorade, not for a leisure beverage like Snapple, customers simply would not buy it. These choices elicited negative response in consumers who stopped perceiving Snapple as a funky and fashionable brand; the beverage’s healthy reputation was damaged too. It is rather clear that Quaker’s executives did not fully understand the Snapple brand and erroneously modified its marketing mix. This failure resulted in the rise of a deleterious discrepancy between the experiential value and benefits customers were used to and expected form Snapple, and the brand’s altered nature. In synthesis, Quaker tried to transplant a marketing mix and execution strategy to a recipient who was not suitable for it, and Snapple, its distributors, and its customers ultimately suffered from

The essential relationship between fixed and variable costs is the same whether the budget is static or flexible. The key is that in the flexible budget, both fixed and variable costs are subject to change. In most cases,

Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense, straight-line depreciation expense, etc.