Dr. Pepper Snapple Group Case Study Essay

Andrew Barker, a brand manager for Snapple deglutitions at the Dr. rain cats and dogs Snapple Group, Inc., must valuate whether or not a profitable market opportunity exists for a new muscle beverage brand to be produced, marketed, and distributed by the company in 2008. He has about 3 months to determine the market opportunity. SWOT.Strengths Weaknesses* Strong portfolio of leading consumer-preferred brands * Integ yardd business model * Strong customer relationships * Attractive positioning inwardly a large, growing, and profitable market * Broad geographic manufacturing and distribution coverage * Strong operating margins and substantive, abiding cash flows * Experienced executive management team * Currently the entirely major domestic nonalcoholic beverage company in the US without a significant branded energy drink of its sustain * Company bottlers and distributors do not serve all areas of the US (by early 2008, 80% of the US market) * foodstuff is already establish ed Opportunities Threats.* Integrated business model provides opportunities for net sales and profit growth by means of the alignment of the economic interests of its brand ownership and its bottling and distribution businesses * Carbonated beverages were the 4th largest nonalcoholic beverage kinfolk in the US in 2006 and the fasted growing beverage category * Average US per capita consumption of energy beverage drinkers increased by 14% since 2004 .* Industry analysts project an average annual growth rate of 10.5% from 2007 to 2011 (down 32% from 2001-2006) which is attributed to market maturity, increased price and packaging competition, and the entrance of hybrid energy beverages, such(prenominal) as energy water, energy fruit drinks, ready-to-drink energy teas, and energy colas * Energy beverage consumers limit their choice to only 1.4 different brands, which suggests brand loyalty in this market.* 5 Major brands (Red Bull, Hansen, Pepsi-Cola, Rockstar and Coca-Cola) dominate the US energy beverage market, accounting system for 94% of dollar sales and unit volume. * The energy beverage market has experience ware proliferation and price erosion in recent years * Energy beverage prices declined 30% from 2001-2006Critical Issues* Dr. Pepper Snapple Group, Inc. is the only major domestic nonalcoholic beverage company in the US without a significant branded energy drink of its own. * 5 Major brands (Red Bull, Hansen, Pepsi-Cola, Rockstar and Coca-Cola) dominate the US energy beverage market, accounting for 94% of dollar sales and unit volume. Alternatives.* Do Nothing* The Dr. Pepper Snapple Group, Inc. bottling and distribution system should introduce an energy beverage, marketed towards adults, ages 34-54. The Energy beverage should include two flavors, with a regular and sugar at large(p) variation of each, all available in a understructureard 16 ounce size, as this segment accounts for the well-nigh growth opportunity (150%). Advertising and expend itures for the new energy drink brand need to avenues through affable media, TV, print, event, etc., as the market is very competitive and consumers are extremely brand loyal. Advertising should include free handouts of the beverage, or trials, to generate buzz and get consumers to try the product.The new product should be able to stand out when next to other energy drinks, maybe package it in a unique bottle, such as glass. They should supply all off-premise retailers, focusing on the convenience stores first, as they account for the most retail dollar sales, and then moving into the supermarkets and mass merchandisers. The new beverage should be priced a little higher(prenominal) than average, at $2.50 per single-serve package.