Dr Pepper Snapple Group

1391 Words Apr 4th, 2014 6 Pages
Dr Pepper Snapple Group, Inc.
Energy Beverages

Author:
Ravi Sockalingam, PhD

Dr Pepper Snapple Group, Inc.’s brand manager Andrew Barker was tasked with recommending the company’s top management if it should decide to introduce a new branded product into the energy beverage market.
A brief overview of the company’s position
Dr Pepper Snapple Group, Inc. maintains a well-entrenched position in the flavored carbonated soft drink (CSD) market. In 2007 he held a market share of the US CSD market. And this share had been steadily growing year to year. The company is also a leader in the non-CSD drink category that comprises ready to drink tea, juice, juice drinks, enhanced water, drink concentrates and mixer categories. In addition
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And the growth of CSD is expected to decline. Part of the company’s strategy has been to invest in developing innovative products. The recent use of natural flavors and no artificial preservatives, and vitamins and proteins in their beverages differentiated Dr Pepper Snapple Group Inc’s products from that of the competitors, and helped strengthen their profitability and growth.
The company also has sound knowledge of the marketing channels for the new product. They know for fact that the highest profit margins from the introduction of a new energy drink would first come from the convenience store channels in single serve packages. Besides, Dr Pepper Snapple Group, Inc. had distributed Monster Energy in selected US territories on behalf of Hansen Natural Corporation.
What factors need to be considered in the decision making process by Dr Pepper Snapple Group Inc.?
There are several forces that may potentially go against Dr Pepper Snapple Group Inc. introducing a new product in the energy drink market.
There is danger that the company is betting its future based on its successful track record in introducing leading brands in the crowded OSD and non OSD (including sports) drinks.
The energy drink market is, however, quite different from the OSD and the non-OSD drinks the company owns, distributes and sells.
The projected sales growth of 10.5% from 2007 to 2011 is in fact a low figure compared to an average growth rate of 42.5 % from
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