Dr. Pepper Snapple Group Case Study

Red Bull is now in the position as the market leader of energy drinks sector, which hold up to 70 percent of the market shares

§ Five dominant competitors: Red Bull, Hansen Natural (Monster), Pepsi (Sobe Adrenaline Rush, AMP), Rockstar, and Coke (Tab, Full Throttle)

To start with, market segment for energy drinks is targeted at group of people in their late teens to early thirties. The age group is determined between 18 to

Red bull is not the leading energy drink provider, but is number two with 36 percent of the Australian energy drink market (2010,popular energy drinks), the red bull company sold over 5 billion cans in 2012 and have sold over 35 billion since it started in 1987.

But as the pop fight has topped out the industry’s giant have began relying in new product flavor and looking noncarbonated beverage for growth.” (strategic management in global context feb 22, 2006).

There are (3) reasons why I have chosen energy drinks as my NAB. First off, there is a growing market for energy drinks. Red Bull and Monster Beverage Corporation, together, form over 80% of domestic energy drinks volumes by estimates. Dollar sales for energy drinks grew almost 6% to $6.67 Billion in measured channels in 2013, which propelled sales growth for convenience stores (Team, 2014). A growing thirst for caffeinated “energy” drinks, which include the likes of Red Bull, Monster, and Rock star, has spurred a heart-thumping surge in sales. Globally, the energy drink industry has gone from a $3.8-billion business in 1999, to a $27.5-billion

Both competition and market size are of major importance when one explores the positioning of a product. In the case of Crescent Pure, this is vital as Ryan must determine the level of competition that will be faced if the product is marketed as either an energy or sport drink. In the case of an energy product, it should be noticed that there is heavy market dominance by Together, Freight, Razor, Torque and Steller, as they account for roughly 85% of the market. Despite this, it should be seen that the average price point for a 5oz can is $2.99 which is notably higher than Crescent’s $2.75 pricing. Additionally, the market size for sport drinks is of particular interest as it is estimated to grow to $8.5 billion by the year 2013. This, coupled with the fact that the market had grown 40% between the period 2010 – 2012, makes this sector of particular interest to PDB.

The target consumer market that should be chosen for a new energy beverage brand is males between the ages of 15 and 26. Marketing to this age group falls between the 12 to 34 year olds that estimate to make up 70 percent of the energy drink market (Kerin & Peterson, 2010). This would allow them to still market to the heavy users but would be able to narrow it down to a specific age group within the market. Marketing to this group would allow you to focus on groups such as high school & college students, athletes, and young adults entering the work force or newly parents. The students that would be using the energy products can use it for staying up to study or to help wake up and be alert in class. Athletes could use this product for refocusing after a workout or practice so they would crash. Young adults could use this energy drink for staying up in there social life late at night or to make sure they are awake in the morning for that new job to impress the boss. A different market would be the parents of a newborn. Markets like this could be beneficial because parents want to stay up to feed their new born and make sure everything is okay during the day especially after a sleepless night or two. Marketing to specific target markets helps companies clarify what the product is used for and how it can be beneficial instead of having it say we

Portland Drake Beverages (PDB) had acquired Crescent Pure, a non-alcoholic, all natural energy enhancing and hydrating functional beverage. Having organic ingredients as the bases of Crescent Pure beverages made the perfect acquisition for extending the PDB organic brand to more markets. These multiple attributes made the drink an attractive product for the consumer, but the necessity to position it, sparked a debate. Some people wanted to market it as an energy drink, while others wanted to market it as a hydrating drink. The VP of marketing, Sarah Ryan, thought that although Crescent Pure fit both of these categories, there was an alternative option. The third option would be to position the new beverages as healthy drinks, this would be a broader market positioning strategy, one that a transcendent product like Crescent Pure, could fulfill. The concern was to simultaneously position the drink in the most lucrative market, while also ensuring that the drinks attributes aligned with the market consumers’ needs.

Energy drinks have outperformed the growth in carbonates in the last few years, and present a substantial opportunity for beverage manufacturers to extract further growth from their sales. There are many driving forces of change and critical success factors in the energy drink industry. Companies such as Coke Cola and Pepsi contend with criticism from health officials due to the excessive caffeine in most high-energy drinks. However, before the 2000’s consumers were accustomed to carbonated soft drinks as the traditional beverage. The shift to an energy drink, sports drink, and vitamin enhanced waters increased sales while becoming an alternative beverage choice for a fast-paced mobile society. Therefore, this industry endures many

FDr Pepper has a great opportunity to penetrate the energy drink market. They could quickly take a major market share and continue to support the ever changing customer needs and ever changing expectations. The only remaining concept is how to do it.

The success the Snapple Beverage Company had achieved by the early 1990s drew the attention of the Quaker Oats Company which bought it in 1994 for $1.7 billion, and planned on maximizing the professedly unequivocal synergies between the “funky” iced tea brand and their established Gatorade brand. Despite Quaker’s efforts and ambition, which some might classify as hubris, the company’s decision to acquire Snapple is often regarded as a clamorous example of a merger and acquisition disaster. This paper analyzes Quaker’s failures using the 4 P’s framework, and proposes an action plan for Triarc’s turn-around of the Snapple brand, tailoring it to a modern market setting.

Red Bull was being sold in over 100 markets and was the market leader in the USA as well as in 12 of the 13 West European markets where it was present (Zenith International, 2004). Red Bull dominated the energy drinks market in most of the Western Europe countries in 2002, with 83% of market share while the rest of top 20 brands had a combined share of 17% (Economist online, 2002). However, Red Bull needs to be aware of declining industry sales because volume growth for energy drinks had slowed in one of its core market, Western Europe, down from 44% in 2000 to 6.5% in 2003 (Zenith International, 2004). The slow market growth in Western Europe can affect Red Bull’s total sales growth. Red Bull needs to develop a brand growth strategy to protect its market share in the declining Western

The energy drink industry is a fairly new market, with the top products being little under 30 years old. There are several strengths, weaknesses, opportunities and threats in the sector that are unique to this particular industry. Through a SWOT analysis, I will analyze this markets’ main components.

The focused Corporation of the subject strategic proposal is PepsiCo Beverages North America. This company was originally founded in 1898 by a North Carolina druggist. PepsiCo Beverages North America (herein referred to as the ‘Company’) sells several brands of consumer beverages in the United States and Canada. The various beverage products span through carbonated soft drinks, juices, readymade teas, isotonic sports drinks, bottled water, and enhanced waters. Several established brands include Diet Pepsi, Mountain Dew, Gatorade, Tropicana products, Aquafina Water, Sierra Mist, Mug, Propel, Sobe, and Dole. Refer to the Competitor Analysis section for in depth product information and listings.