dr pepper snapple group case study essay
1 . HOW DO YOU CHARACTERIZE THE BEVERAGE CATEGORY, COMPETITORS, STATIONS, AND DPSG’S CATEGORY CONTRIBUTION IN LATE 2007? _
In late 2007 the power beverage category was attaining market maturity and projected to have a slow annual expansion rate from 2007 to 2011 (10. 5%) than it had between 2001 and 2006 (42. 5%). Rising prices, presentation competition, as well as the introduction of hybrid energy beverages likewise added to the slower projected growth rate. However in 2007 the market even now saw growth of 32%.
The class is dominated by a few major brands (94% of buck sales), with Red Bull far over a pack having a 43% dollars sales market share.
The other 4 are in close competitions with dollar revenue market stocks and shares from 10-16%. Though Reddish Bull is growing, so will the competition. New, aggressive competition into the industry and brands offering affordable prices has brought Reddish colored Bull’s business down by 82% in 2000 to 43% in 2007. This kind of 43% of dollar product sales is managed with only a thirty percent share of unit circumstance volume. Due to loyalty to Red Bull, consumers spend a premium price for its goods.
Red Bull’s almost 8. 5 ounces cans sell for the same cost (approx. $2. 00) as much competitors’ sixteen oz . can lids and their of sixteen oz . can sells for about $3. 60.
This dedication puts Reddish colored Bull considerably above others and leaves them to contend with each other about price and packaging. Pepsi and Rockstar are not forecasted to have any kind of significant multimedia expenditures in 2007, but Red Bull and Hansen Natural Organization are projected to increase their very own media costs to $60. 9 Mil (from $39. 6M) and $153, 800 (from $61, 100) correspondingly. Once again, it can be clear to see the difference among Red Bull and the remaining portion of the group. Coca-Cola (Full-Throttle, Tab) is forecasted to decrease its media costs from $7. 3 , 000, 000 to $492K, which is still much more than Hansen, although far from the expenditure that Red Half truths maintains.
Off-premise retailers signify 71% of total price tag dollar sales compared to 29% for on-premise retailers. Off-premise retail revenue are focused by convenience stores (74%), however the off-premise stores are gradually evolving. Grocery stores are slowly and gradually decreasing in percentage of sales, whilst salesin supermarkets and Wal-Mart are growing. Brands with broad products, multi-packs, and widespread circulation networks happen to be succeeding in supermarkets and stores just like Wal-Mart. In convenience stores, brands with small product lines and high products on hand turnover, will be gaining accomplishment. Restaurants, dance clubs, and other on-premise retailers continue to be constant and they are not forecasted to have any significant changes.
In 2007 DPSG started out setting up circulation channels, which are projected to get to 80% of its marketplace by early on 2008. In addition, it began releasing Monster energy drinks for Hansen. DPSG also took part in the U. S. Sports Drink marketplace in late 3 years ago with its release of Accelerade RTD. Having a distribution network, DPSG presented Accelerade to convenience stores, supermarkets, and mass merchandisers. That targeted the $35 million Americans who were competitive and exercise regularly. It supported the launch using a large advertising budget which will consisted of a website, podcasts, search-engine marketing, and a chat. It stressed the healthy proteins content to identify itself from your competition.
_2. DOES YOUR CHARACTERIZATION BODE VERY WELL FOR A FRESH ENERGY DRINK BRAND INTRODUCTION GENERALLY AND FOR DPSG, INCORPORATION. IN PARTICULAR? _
Generally it does not bode well for the development of a new strength beverage company but in Doctor Pepper Snapple Group’s circumstance, they may have brand dedication, budget, and awareness to pull it away. With a large market share and large media price range, Red Bull makes it tough for new brands to be competitive. Unless a brand is willing to spend a lot of cash upon R&D, media expenditures and competitively cost its product to give incentive for buyers to switch coming from Monster or perhaps one of the other brands, it would not really gain enough of the market share to compete. Red Half truths is in a league of its own therefore new entries would generally be rivalling with Huge, Full-Throttle, Tabs, Rockstar, and lots of other fewer popular brands. DPSG alternatively has the brand loyalty, fairness, image, and budget to support such a venture.
In addition, it has some one of a kind qualities like the addition of protein, a bigger, re-sealable bottle, and a great emphasis on functionality over simply something to perk the buyer up. As DPSG previously has a target market, distribution network, and manufacturing set up, it might feasibly your market around the shoulders of its great name. The simple fact that DPSG has differentiated itself from the other brands as well gives all of them a lower-leg up. If this could successfully attract even more consumers through the 35-54 year old range by riding the healthy graphic and advertising a much healthier, more satisfying energy beverage, it could that pinpoint market and be a great competitor.
_3. WHAT TARGET BUYER MARKET OUGHT TO BE CHOSEN FOR A NEW ENERGY BEVERAGE MANUFACTURER? _
The opportunity lies in the 35-54 yr old range. This can be a market that will not receive much attention and is not specifically targeted. Due to the fact that this target market eats only a bit less than the 24 and under marketplace, there is a wonderful opportunity to enhance a product that suits their needs and advertisements that speak to these people. By capturing that industry, DPSG will stay consistent with it is brand image and give this the awareness and encounter to begin shifting into the 12-34 year old marketplace in the future. Following 35, lots of men and women start to exercise harder, and more as often as you can maintain all their youth as much as they can. In the event that DPSG can offer a happy channel between a sugary strength drink and a full-blown protein wring, they could help the 35+ consumers think younger, although still giving them beneficial things that their body need.
_4. WHAT ITEM SHOULD BE PRESENTED AND HOW WHEN IT IS00 POSITIONED/DIFFERENTIATED? _
Considering DPSG’s brand picture, I think its best bet will be to introduce a decreased carb, low sugar, proteins infused energy tea. Since the earliest civilizations, teas have been completely used for their various health advantages and today is not a different. In the event they concentrate on the 35-54 market, a tea can be much more appealing than a sugary, carbonated beverage. Since Snapple has these kinds of a good term in today’s market, especially with adults, I believe the drink should be branded within the Snapple identity. As of at the moment, Snapple’s many popular tastes out coming from all its products will be Lemon Tea and Peach Tea. DPSG could parlay that popularity into an energy tea with the help of a fewingredients.
In order to position itself in a more grown up marketplace, differentiate alone from the competition, and stay true to its loyal clients, DPSG should certainly introduce the tea a great aluminum bottle of wine with the same dimensions as its 16 oz . glass bottles. This allows this to be resealed and gives it a different appear than the strength drink competition on the shelf. 4-packs could also be deemed for superstore shelves. The tea will need to keep with all the healthy photo by using vitamin supplements, minerals, herbal products, and other natural ingredients to provide sustainable energy and health benefits that other energy drinks just do not provide. Instead of centering on providing a huge energy burst, DPSG should focus on providing a youthful, enthusiastic feeling, and restoring your body to total potential.
_5. THROUGH WHICH CHANNEL(S) SHOULD A BRAND NEW ENERGY COMPANY BE GIVEN AWAY? _
The new energy manufacturer should be distributed mostly through off-premise stores, but health conscious on-premise merchants such as subway would end up being a good match. Convenience stores most appropriate place to start due to amount of exposure they offer and their track record in the energy drink industry. Supermarkets can also be a must since the majority of supermarket shoppers happen to be within the target audience. Whole food would be a good way to highlight a new product to health conscious 35-54 yr old adults. As well, vending machines in fitness centers and even positioning fridges in sporting goods stores could entice attention in the target market. Other possible vending machine areas include golf-courses, college gymnasiums, police departments, firehouses, and airports.