Letter To Dr Pepper Snapple

1. Consider Coca-Cola’s advertising throughout its history. Identify as many commonalities as possible for its various ads and campaigns. (For a list of Coca-Cola slogans over the years, check out http://en.wikipedia.org/wiki/Coca-Colaslogans.)

How would you characterize Snapple’s brand image and sources of brand equity? What are the strengths and weaknesses of the brand’s existing personality and image?

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.

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

Michele “Mikey” Bebe, head of Marketing, well known as a brand-building genius, but her attitude has a lot to be desired. What Mikey brings to the team is her opinion about how her past employment does things better than DecisionTech.

Exchange rate gains or losses are brought to account in determining the net profit or loss in the period in which they arise, as are exchange gains or losses relating to cross currency swap transactions on monetary items. Exchange differences relating to hedges of specific transactions in respect of the cost of inventories or other assets, to the extent that they occur before the date of receipt, are deferred and included in the measurement of the transaction. Exchange differences relating to other hedge transactions are brought to account in determining the net profit or loss in the period in which they arise. Foreign controlled entities are considered self-sustaining. Assets and liabilities are translated by applying the rate ruling at balance date and revenue and expense items are translated at the average rate calculated for the period. Exchange rate differences are taken to the foreign currency translation reserve.

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

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?_

How would you characterize Snapple’s brand image and sources of brand equity? What are the strengths and weaknesses of the brand’s existing personality and image?

Coca-Cola was invented by John Pemberton the Coca-Cola Company began in 1886. With more than 1.9 billion consumers a day, in more than 200 countries, Coca-Cola is dedicated to being the world’s largest beverage company by maintaining and gaining customers. Customer preference is a core value to coke. Coke has dedicated itself to meet the thirst needs of every customer. They engage with their customers at home, restaurants, sporting events. Almost everywhere customers go, they can find a coke product. They build their top line growth and capital efficiency through investment in FIFA World Cup, “Open Happiness” global campaign, and have many worldwide partners, increasing their business nearly 5% every year by creating a diverse customer base.

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:

From 1972-1993 Snapple Fruit Juice Company flourished while many startup premium fruit drinks struggled and, in many cases, failed. In fact, most of Snapple's successful competitors during this time were sold to larger distribution companies allowing Snapple to create a Brand image and distribution alliance for the "smaller guy." They were a cult classic, promoted by loud, brash promoters like Howard Stern and Rush Limbaugh who had huge followings of independent, "stick-it-to-the-man" listeners. Snapple also created the legend of Wendy Kaufman, a former truck dispatcher and employee of Snapple. She was an instant success with the kind of style and attitude that matched Snapple's independent image. As the product began

The success the Snapple Beverage Company had achieved by the early 1990s drew the attention of the Quaker Oats Company which bought it in 1994 for $1.7 billion, and planned on maximizing the professedly unequivocal synergies between the “funky” iced tea brand and their established Gatorade brand. Despite Quaker’s efforts and ambition, which some might classify as hubris, the company’s decision to acquire Snapple is often regarded as a clamorous example of a merger and acquisition disaster. This paper analyzes Quaker’s failures using the 4 P’s framework, and proposes an action plan for Triarc’s turn-around of the Snapple brand, tailoring it to a modern market setting.