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Dr. Pepper Case Analysis Essay

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I. Define the Problem Central Problem

Dr Pepper Snapple faced problems deciding whether the company should enter into the energy drink market. The energy drink market is a high growth and high-margin business. Recent rise in such functional drinks has Dr Pepper wanting to tap into this fast growing market. Dr. Pepper is one of the only major domestic carbonated soft drink companies that have not introduced a line of energy drinks. The challenge Dr Pepper Snapple faces is what would be the best way for it to market a new energy drink product. The company simply does not have the income to compete in advertising against Red Bull. Sub Problem Dr Pepper is indecisive about what market it wants to target. The energy drink …show more content…

There are some female consumers, but the male outnumbers them. Males were estimated to account for about 70 percent of energy beverage consumption. Future customers will be in the age range of 34 to 54, both male and female. Some other demographics are athletes and rock stars which were targeted by the Rockstar brand.

Consumers’ Perception Consumers’ perception of the energy drink is positive being that they have proved to provide a great deal of energy. The drinks actually boost energy and increase alertness. Dr Pepper Snapple being the third largest soft drink company positioned in United States, Canada, and Mexico. Dr Pepper Snapple has some of the leading soft drinks with 7 Up, AW Root Beer to name a few. So it is no stranger to the consumer market. The company has strong customer relationships with some of the largest bottlers and distributors. Dr Pepper Snapple is affiliated with major retailers such as Wal-Mart, Safeway, Kroger, and Target.

Major Influences on Consumers The pricing in the energy drink market is low and competitive, with the suggested retail price of about two dollars per single serve package. There was a decline in the price of the energy drink from 2001 to 2006. Attributes such as, larger packages, multi-packs, and increasing availability in supermarkets and other stores caused the prices to decline. The ratings of such energy drink are relatively high and users are generally loyal to a certain

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