Dr Pepper Snapple Group Analysis

Kool-Aid, a brand that offers flavored drink mix owned by Kraft Foods is part of the soft drink industry. Three main players control the soft drink industry and they are Coke (42.8%), Pepsi (31.1%), and Dr. Pepper Snapple Group (15%). First of all, a soft drink is defined as any drink that contains water, but not alcohol. This includes soda, juice/punch, energy drink, tea, sports drink, and water. There are more than a thousand different soft drinks in the U.S. market, and among the one thousand variety of drinks, the three main players offer about 400 of them (40%). Since the three dominant brands pretty much control the market, most of the small players compete by offering inexpensive drinks that are often only sold in particular retail chain such as Sam’s Choice and Shasta Beverages. They also compete in the newer category of soft drinks such as tea and energy

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).

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.

Essentially, all risk in price fluctuations in the raw materials market is transferred and paid for by the bottling business. Supplier power of the concentrate business is also exerted over the bottling business by the threat of acquisition and vertical integration – the concentrate business supports its bottling business through providing suggestions for operational improvement. While this support can be viewed positively, both Coca-Cola and Pepsi have acquired its bottling franchises due to their dissatisfaction over the operational effectiveness of its bottling business. Through the last few decades, Coca-Cola and Pepsi have oscillated between acquiring and re-franchising its partner bottling businesses.

Stability. The returns received by bottlers are less than returns received by concentrate producers due to the risk levels as well. The concentrate producers are responsible for brand promotion and invest heavily in trademark to stimulate sales. High returns are what they get as the result. However, bottlers have little risk in their operations as they are given the famous name well-known all over the world. This development provides them with stable returns, and low risk.

§ Five dominant competitors: Red Bull, Hansen Natural (Monster), Pepsi (Sobe Adrenaline Rush, AMP), Rockstar, and Coke (Tab, Full Throttle)

Hawaiian Punch is the top-selling fruit punch drink in the United States, contributing to the ninety-nine percent brand awareness among U.S. consumers. The product line in 2004 consisted of eleven flavors, with the original Fruit Juicy Red flavor being the most popular brand with a wide margin. A Hawaiian Punch light version of Fruit Juicy Red was recently introduced with sixty percent less sugar. At first, the traditional focus of Hawaiian Punch was centered towards children; however, the company now wants to refocus its positioning statement. Another brand consideration is the innovation of a new flavor into both finished goods and direct store delivery networks. The third concern is to address allowances relative to innovation in Hawaiian Punch finished goods and Direct Store Delivery (DSD) networks and to media advertising. Give the previous considerations; we have developed new marketing proposals for future marketing decisions.

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

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?_

The roots of Snapple Corporation date back to 1972 in Brooklyn. In 1980s Snapple introduced ready-to-drink fruit juices and iced teas. Snapple was the first company to sell its drinks in single serving wide-mouthed glass bottles rather than aluminum cans. By 1991 Snapple emerged as a nationally recognized brand.

Given the track record of Dr Pepper-Snapple and looking at the SWOT analysis I feel that Dr Pepper should introduce an entire new product line. They can leverage their ability to manage a diverse brand business, the leverage they have in the RTD segment, and the strengths that the business as a whole has.

Coca-Cola Company has realized significant growth since its establishment to become a global leader in the marketing, manufacturing, and distribution of syrup and soft drinks. Out of the four generic strategies, the company has followed the differentiation strategy to make its products unique in the market. Its interest is to maximize the market share through the development of the most innovative products and the establishment of effective strategies to influence the customer’s decisions. In such a way, the company has integrated various strategies to ensure that desirable results are attained in the market. Its strategic choices align with the differentiation strategy in an attempt to make its products unique and meet diverse market requirements. To reduce its weaknesses, the company should consider exploiting key opportunities in the market including venturing in the packaging of water, promotion of new brands, and launching of healthy products. In particular, the vision and mission statement of Coca-Cola seems to have reconfirmed and changed in this process of company’s strategic analysis.

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 soft drinks market is dominated by 3 household Coca Cola, PepsiCo and Dr Pepper Snapple. Coke Zero is successful because it was carried to new category – sugar free coke and be first to get into the prospect’s mind. It is filled a need for an underserved consumer -- young adult males, offering to anyone seeking great Coca Cola taste with zero calories. In a world where new products rise and