Crush Case Study

Cadbury Beverages, Inc. is a beverage division of Cadbury Schweppes PLC. They were a major global soft drink and confectionery marketer who made worldwide sales of about $4.6 billion. Cadbury was given the position of the world’s first soft drink producer, which can be traced back to 1783 in London. In 1989 Cadbury Schweppes PLC was one of the worlds largest multinational firms and was ranked 457th in Business Week’s Global 1000. Their beverages accounted for 60% of the company worldwide sales.

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In 1990 the executives have decided to focus on initial attention on the Crush brand of fruit-flavored carbonated drinks, but there were three problems that needed to be attended to: 1.) Immediate efforts were needed to rejuvenate the bottling network for the Crush soft drink brand 2.) They had to sort through and figure out what the Crush brand equity is, how the brand was built and develop a base positioning 3.) A new advertising and promotion program for Crush had to be developed, including setting objectives, developing strategies, and preparing preliminary budgets.

With the average American consuming more than 45 gallons of soda in the year of 1989, the carbonated soft drink industry was a $40+ billion industry with fierce competition in the United States. However, of the numerous distributors that fight against each other for market share, there are three major participants consisting of Coca Cola, PepsiCo, and Dr. Pepper/Seven Up that account for 82% of the industry sales. These sales account for the bottling of soda, the production of concentrates that are essentially the bases of each soda, as well as the actual retail outlets where these carbonated drinks are actually sold. Amongst these outlets, supermarkets account for 40% of the total sales in the carbonated drink industry creating fierce competition between rival brands.

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Before 1986, the average case volume for orange flavored carbonated drinks was in-between 100 to 102 million cases. By 1986 the case volume increased to 126 million, this was due to PepsiCo introducing Mandarin Orange Slices and Coca-Cola introducing Minute Maid Orange. The widespread distribution of these two brands along with heavy advertising and promotion restored the market for orange flavored carbonated beverages. Orange Crush had the lowest market share in the Orange soda market in 1989.  In January 1990, Crush decided to focus more of their efforts on the orange flavored carbonated beverage market. The three steps the company took to re-launch Orange Crush was that first they needed to apply efforts to revive the bottling network for the Orange Crush soft drink brand. Secondly, they had to carefully consider how they were going to position Crush in order to build on the existing customer market and provide opportunity development of the Crush brand and its various flavors. Lastly, they needed to come up with a new innovative advertising and promotion program, this included setting objectives, developing strategies, and preparing initial budgets.

Source: https://upload.wikimedia.org/wikipedia/commons/9/9c/Orange_Crush_box.jpg

In January 1990, there was a complete revamp of Cadbury’s marketing strategy as it relates to the Crush brand. First and foremost, the decision was made to focus on primarily the orange flavor opposed to the others. About 66% of Crush’s sales volume consisted of orange, so they decided to make it their priority. Next in the strategy was to focus on reestablishing Crush’s bottling network, specifically the orange crush. Third was to focus on strategic positioning to the existing customer base. They felt it was key to do so because this would allow them to expand their other flavors. Lastly, Cadbury approved an advertising and promotion program not previously established.

A big portion of this revitalized strategy was to better develop their bottling network. By mid-1990, 136 new bottler agreements had been made. This allowed Crush to be represented in 75% of the orange soda market. This led to more advertising and promotion support, and furthermore allowed a more expansive reach for the company. Since Crush had high brand awareness in major markets such as Seattle, San Francisco, New York, Miami, Los Angeles, and Boston, advertising and promotion were not such uphill battles as originally thought. Nevertheless, Crush grew increasingly tactful with advertising and promotion expenditures to ensure their sustained growth. This included tactics such as saving expenses on a per case basis for promotions, and creating pro forma statements to properly forecast their actions.

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This past summer, Crush soda and “Fantastic Four” teamed up to feature advertisements promoting both the soda and the new “Fantastic Four” movie. Each Fantastic Four member was paired up with a different flavor. Cans and bottles released during this campaign also featured the faces of their superhero partner, and had codes that could be entered online and customers could win tickets to see the new movie. Crush and “Fantastic Four” are both attempting to rebrand themselves. The new reboot of the “Fantastic Four” was an attempt to be taken more serious than the previous series of movies. Crush is too, trying been seen as a more serious competitor in the soda market (now as part of the Dr. Pepper Snapple Group).  

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http://screenrant.com/fantastic-four-reboot-crush-soda-pop-cans/

“‘Fantastic Four’ Reveals New Merchandising with Crush Soft Drink Cans”

Jeremy Owens 6/20/2015