Dr. Pepper Snapple Group, Inc. offers a wide variety of beverage
brands to consumers. The company has identified seven key strengths that make
it a strong competitor against other soft drink companies. With these
strengths, Dr. Pepper Snapple Group, Inc. can capitalize on its’ business
strategy. Although their net sales in 2007 was 5.748 $billion, they hope to tap
into the energy drink market.
The possibility of Dr. Pepper
Snapple Group, Inc. coming out with a new energy drink can only mean something
great is about to come. The company is very knowledgeable about its market and
about its competitors. In order for Dr. Pepper Snapple Group, Inc. to enter
this market they need to create a marketing plan for the branded energy drink
which would require the identification of a target market and marketing mix as
well as a recommended budget for the launch.
In an already competitive industry like
that of the energy drink market, Dr. Pepper Snapple Group, Inc. faced a tough
decision to introduce a new branded product into the crowded energy beverage
market. Being the only major domestic nonalcoholic beverage company in the
United States to not have an energy drink of it’s own, the decision was made to
explore the market and compete with their competitors.
With
highly reputable competition consisting of major brands such as Red Bull,
Monster Energy, and Rockstar as well as hundreds of smaller brands, the energy
drink industry is a billion dollar industry with retail sales expected to
continue growing in the future. With this being said, Snapple Inc. introduced a
ready to drink sports drink in May of 2007 in the hopes of stealing a share of
the high growth high margin energy drink industry.
Dr. Pepper Snapple Group, Inc. realized
that the energy drink market provided the company with a huge opportunity for
growth. The company acknowledged that in order for them to enter the energy
drink market they needed to have a solid marketing plan for a branded energy
drink that included a first-year sales and profit projection. Their marketing
plan had to include a target market and marketing mix along with a projected
budget for the unveiling of their product. After successfully making their
marketing plan the Dr. Pepper Snapple Group, Inc. needed to identify who their
target market was. Next, product line and brand positioning is essential, which
requires the company to decide what size they want to make their product.
Along with identifying the size of the
product they needed to identify how they can differentiate themselves from
their competitors. A catchy slogan can help them achieve this, which will allow
them to get their message to the consumer. The next step for the company is to
identify the marketing channel they want to enter. The manufacturer’s suggested
retail selling price and channel margins are next, this allows the company to
decide how much to price their product. This is important because a price too
high or too low can affect the consumers buying decision immensely. Advertising
and promotion is also very important for when analyzing the market opportunity.
Brand websites, events, and sponsorships are mainly used in advertising energy
drinks. After accomplishing all that the company can finally access their
market opportunity.
The company knew that several marketing
decisions had to be made with the start of something brand new. With so many
competitors differentiation, and positioning choices were key to making sure
their product succeeds. The target
market was found to be men between the ages of 12-34, with a focus on a drink
that provides an energy boost, mental alertness, and refreshment. The company wanted
to position their drink as an energy drink for adults, which is something that has
not been done before.
This
article explains that even though Dr. Pepper Snapple Group Inc. is in direct
competition with beverage mega-companies Coca-Cola and PepsiCo (that combined,
hold 59% of the market), they manage to actually perform better than these
rivals in recent years. Their market research is so intense and they are able
to stay ahead of consumer trends, as was the case with many consumers moving
away from sugary soda to more health conscience options, and less calories
overall. As soda sales dip, even with their own Dr. Pepper brand, they were
able to capitalize on their Snapple brand, as well as their Schweppes brand
(flavored sparkling water).
They benefit from being a smaller
company; currently not selling internationally they avoided currency challenges
in some Asian markets that had a negative impact on their rivals that do
business in said markets. They have also made it a point to partner with other
emerging brands, “”We have a history of partnering with emerging brands where
we can minimize the risk,” says Trebilcock” (Vice President of marketing for
Dr. Pepper Snapple), and those included Monster Energy and Vitamin Water. Dr.
Pepper Snapple has also partnered with their rival PepsiCo to increase their
distribution. Dr. Pepper Snapple is a relatively small company compared to
their giant rivals, yet they use their marketing research to help them
determine trends, and stay in competition with their rivals in the beverage
industry.
“Dr. Pepper: A scrappy survivor in a sea of struggling soda
giants”
Elizabeth G. Olson, Fortune Magazine online. Apr. 23, 2015
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