1. How would you characterize the energy beverage category and competitors in late 2007?
The energy drink market is very competitive as it has several major brands in play. These brands include Red Bull, Monster Energy, Rockstar, and PepsiCo’s AMP. The major purchases of the energy drinks are made in the convenience stores, supermarkets, and mass merchandisers as they account of 71% of the retail sales compared to 29 percent of sales made in restaurants and night clubs (Kerin & Peterson, 2010). The market for 2007 to 2011 was predicted to have a 10.2 percent growth rate. Red Bull currently dominates the Energy drink as it boasts an estimate of 43% of dollar sales in 2006 while the closest competitor has a 16% of the sales share (Kerin & Peterson, 2010). It is becoming a fad as I have noticed that there are many new energy drink flavors entering the market and I know that my wife is addicted to those as she drinks one a day in lieu of coffee. 2. Does your characterization bode well for a new energy beverage brand introduction generally and for Dr. Pepper Snapple Group, Inc. in particular?
The competition for the energy drink is tight as PepsiCo, Coca-cola, and Red Bull are heavily involved in this market. The growth is there and poses an opportunity but it will be tough to snag some of the shares. A friend of mine who owns and operates a home-based business selling XB-Fit energy drinks (http://xbfit.net/) said that he faces 2 major challenges when it comes to selling the energy drinks. One challenge is to sway the consumers try their product and pry them away from other brands. The second challenge is assuring consumers that new energy drinks are safe as many health concerns regarding the energy drinks have come up. Dr. Pepper Snapple Group has the distribution ability to deliver and the resources to market the energy drinks, but the marketing campaign will have to be the biggest campaign that the Dr.Pepper Snapple Group has ever done. In my...
...Action Plan: DrPepperSnapple Group, Inc. Energy Beverages
Action Plan: DrPepperSnapple Group, Inc. Energy Beverages
The Market. 3
Customer behaviour. 4
Marketing Mix 4ps. 5
Target Market. 6
Product Line and Positioning. 6
Advertisements and Promotion. 6
The history of DrPepperSnapple Group Inc. is very complex, but all started when Jean Jacob Schweppe invented the world’s very first carbonated mineral water in 1783. A young pharmacist, Charles Alderton from Waco, Texas made DrPepper in 1885. It was only sold in the pharmacy where Alderton worked. In 1970 in the New York -region health food store owners invented a new apple soda, Snapple. The Unadulterated Food Corporation owned Snapple and later it becomes Snapple Beverage Corp. Within the years companies were growing and ownerships have been changed and DrPepperSnapple Group Inc. has formed from different beverage companies. Today DrPepperSnapple Group Inc. is one of the most known and largest non-alcoholic beverage producers in the U.S. Dr...
...TEXAS A&M UNIVERSITY CORPUS CHRISTI
DrPepper-Snapple Inc: Energy Drinks
In the ever changing world of customer needs and expectations DrPepper-Snapple was faced with an increased customer focus on energy drinks. This area, when exploited correctly, is a high growth and high margin beverage business. In early September 2007, Andrew Baker had his marching orders. He emerged out a long discussion about entering the energy drink business and off he went.
First let’s understand that an energy drink simply does as its title suggest, gives the consumer energy. This is accomplished most of the time with caffeine from a guarana bean. Some of the other players in this market also use taurine, ginseng, carnitine, and B Vitamins
Let’s also take a look at DrPepperSnapple Group Inc. They are a major integrated brand owner that also performs bottling and operates strong distribution capability in the United States, Mexico, Canada, and the Caribbean. They also have a business model that differs from its competitors. They are a major carbonated soft drink (CSD) business but they put theretheir focus and margins in there ready to drink market (RTD). This investment in the RTD sector gives them a strong leverage point when evaluating entering the energy drink market, which is strong with...
In early September 2007, Andrew Barker emerged from a lengthy discussion on the energy beverage market in the United States. As a brand manager for Snapple beverages at the DrPepperSnapple Group, Inc., he was charged with assessing whether or not a profitable market opportunity existed for a new energy beverage brand to be produced, marketed, and distributed by the company in 2008. DrPepperSnapple Group, Inc. was the only major domestic nonalcoholic beverage company in the United States without a significant branded energy drink of its own. The decision to explore a new energy beverage was made by senior company management as part of a corporate business strategy to focus on opportunities in high-growth and high-margin beverage businesses. After launching a ready-to-drink sports drink, the DrPepperSnapple Group, Inc. believed they should put into consideration of introducing a new energy drink beverage.
1. Decision problem:
In the decision process, I am going to explain the key decision issues that DrPepperSnapple Group, Inc. will be faced with when launching their new energy drink “Rush.” The first key thing to ask your self (as the decision maker) is when launching a new energy drink will it be profitable? Obviously if your company will not make a profit from...
DrPepperSnapple group, Inc. is a major integrated brand owner, bottler, and distributer of nonalcoholic beverages in the United States. In 2007 they had net sales of $5.748 billion, 21 manufacturing facilities and approximately 200 distribution centers in the United States. They are the number one Company in carbonated soft drink products in the United States.
Their business strategy is to invest most heavily in their key brands to drive profitable and sustainable growth by strengthening consumer awareness, developing innovative products, and brand extensions to take advantage of evolving consumer trends, improving distribution and increasing promotional effectiveness.
DrPepperSnapple Group, Inc. also wants to focus on driving growth in their business with emerging categories, through brand extensions, new product launches, and selective acquisitions of brands and distribution rights. The company has a future goal of significantly increasing the number of branded coolers and other cold drink equipment over the next few years, which is expected to provide an attractive return on investment. The company also intends to leverage its integrated business model to reduce costs by strategically creating greater geographic manufacturing and distribution coverage and to be more flexible and responsive to the changing needs of large retail customers by coordinating sales, service,...
Case 1: DRPEPPERSNAPPLE GROUP, INC. ENERGY BEVERAGES
The DrPepperSnapple Group, Inc. (DPS) was incorporate in Delaware in 2007. The company was spun-off from Cadbury Schweppes, the British company and public on May, 2008. Being one of big beverage companies, DPS is major integrated brand owner, bottler, and distribution of nonalcoholic beverage in the United State, Canada and Mexico and the Caribbean
In the United State, the company’s net sales is 89%. The company participates in both the flavored carbonated soft drink (CSD) and non-CSD market segment. The CSD’s key brands are DrPepper, 7UP, Sunkist, A&W. The non-CSD’s key brands are Snapple, Mott’s, Hawaiin Punch, Clamato.
In Canada, the net sales is 4%. The firm participates in both CSD and non-CSD market segment as the United State market.
In Mexico and Caribben, the net sales is 7%. The company participates in carbonated mineral water, flavored CSD, bottled water, and vegetable juice categories. Some key brands include Penafiel, Clamato, and Agufiel.
1. Internal factors:
Strengths: DPS holds the outstanding strengths more than other competitors in the beverage market about management, marketing, manufacturing and finance.
Experienced executive management team: the company is managed by the diverse skills management team with...
...in the U.S. ban soft drink products in public schools because of obesity issues. The use of some ingredients in Coke products may be hazardous to one’s health and regulations may soon require warning labels.
Coke collaborated with the Apple iTunes in a digital program that focuses on youth sensitivity marketing, the company commits not to advertise to target audiences under the age of 12 has gained the respect European Commission.
Cadbury Schweppes PLC plans to divest its beverage division on 2007. Hershey Foods has expressed interest as well as various private-equity firms. Federal regulations prohibit PepsiCo and Coke from bidding for Cadbury’s carbonated soft drink business. Analysts however believe that the brand Snapple which Cadbury sells would be a good fit for Coke. PepsiCo would likely benefit most from acquiring Cadbury’s Mexican Assets with such strong brands as squirt, crush and Canada Dry.
The 50-50 joint venture between Nestle and Coca-Cola Co. known as the Beverage Partners Worldwide is now proposed to come to an end. This venture on selling tea may open doors for PepsiCo.
III. ALTERNATIVE COURSES OF ACTION
➢ Invest in the snack business through collaboration with Nestle, or other food manufacturers.
Invest in a new product in other food manufacturing companies.
➢ Lower cost of investment than in creating a snack division.
➢ Source for additional...
...1.0 COMPANY BACKGROUND
Dr. PepperSnapple Group, Inc. is a leading integrated brand owner, bottler, and distributor of non-alcoholic beverages in the US, Mexico, and Canada as well as the Caribbean. It is number 1 flavored carbonated soft drink (CSD) company in the Americas and a leading innovator and marketer of functional/non-carbonated beverages by having more than 50 brands that are synonomous with refreshment, fun and flavor. In the US and Canada, this company primarily participate in the flavored CSD market which consist of finished beverages and manufacture beverage concentrates and fountain syrups. In the non-carbonated beverage (NCB) market in US, Dr. PepperSnapple Group participate in manufacturing ready-to-drink tea, juice, juice drinks and mixer. In addition, this company participate in carbonated mineral water, flavored CSD, bottled water and vegetable juice categories in Mexico and the Caribbean.
2.0 DECISION-MAKING PROCESS
Andrew Barker, the brand manager for Snapple beverages at the DrPepperSnapple Group, Inc., was charged with assessing whether or not a profitable market opportunity existed for a new energy beverage brand to be produce, marketed, and distributed by the company. Although no simple formula exists that can ensure a correct solution to this problem, use of systematic decision-making process can...
...brands, DrPepperSnapple Group (DPS) has a proud legacy of innovation, bold and distinct flavors, and entrepreneurial spirit.
On May 7, 2008, DPS became a stand-alone, publicly-traded company on the New York Stock Exchange as the result of a spin-off by Cadbury, plc which held the Cadbury Schweppes Americas Beverages business group of entities.
One of North America's leading refreshment beverage companies, DPS markets more than 50 brands of carbonated soft drinks, juices, teas, mixers, waters and other premium beverages. The company's strategy, brands and people have made it a strong, sustainable and profitable business.
The company's integrated business model enables the company to manage the entire value chain from innovation to the store shelf.
The Company now known as DPS has evolved from a combination of discovery, invention and collaboration. This rich history includes the very birth of the soft drink in 1783, when Jean Jacob Schweppe perfected the process for carbonating water and created the world's first carbonated mineral water.
DrPepper and Snapple, the flagship brands of DPS, have origins that share Schweppe's entrepreneurial spirit. Charles Alderton, a young pharmacist in Waco, Texas, invented
DrPepper in 1885. It was served at the drug store where Alderton worked and the first