Cadbury Beverages Case

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Company Description

Cadbury Beverages, Inc. is the beverage division of Cadbury Schweppes PLC, a major global soft drink and confectionery marketer. In 1989, Cadbury Schweppes PLC had worldwide sales of $4.6 billion, which were produced by product sales in more than 110 countries. Cadbury Schweppes PLC headquarters are located in London, England; Cadbury Beverages, Inc. worldwide headquarters are in Stamford, Connecticut.

Cadbury Schweppes PLC has the distinction of being the world’s first soft drink maker. The company can trace its beginnings to 1783 in London, where Swiss national Jacob Schweppe first sold his artificial mineral water. Beginning in the 1880’s, Schweppes expanded worldwide, particularly in countries that would later form the British Commonwealth. In the 1960’s, the company diversified into food products. In 1969, Schweppes merged with Cadbury. Cadbury was a major British candy maker that traced its origins to John Cadbury. In 1989, Cadbury Schweppes PLC was one of the world’s largest multinational firms and was ranked 457th in Business Week’s Global 1000. Beverages accounted for 60 percent of company worldwide sales and 53 percent of operating income in 1989. Confectionery items accounted for 40 percent of worldwide sales and produced 47 percent of operating income.

Strategic Focus and Plan

The Mission

Crush brand of fruit flavored carbonated beverages. Three issues were prominent. First, immediate efforts were needed to rejuvenate the bottling network for the Crush soft drink bard. Second, accounting to one executive,” to sort through and figure out what the Crush brand equity is, how the brand was built… and develop a base positioning.” Third, a new advertising and promotion program for Crush had to be developed, including setting objectives, developing strategies, and preparing preliminary budgets.

Goals/Objectives

In January 1990, marketing executives at Cadbury Beverages, Inc. began the challenging task of re-launching the Crush, Hires and Sundrop soft drink brands. These brands had been acquired from Procter & Gamble in October 1989.

Industry Analysis

There are three major participants in the production and distribution of carbonated soft drinks in the United States. They are concentrate producers, bottlers, and retail outlets. There are over 40 concentrate producers in the United States. However about 82 percent of industry sales are accounted for by three producers: Coca-Cola, PepsiCo, and Dr. Pepper/Seven Up. Approximately 1,000 bottling plants in the United States convert flavor concentrate into carbonated soft drinks. Bottlers are either owned by concentrate producers or franchised to sell the brands of concentrate producers.

|Market Share of Top 10 Soft Drink Brands in the United States, 1989 | | | | | | | |Coca-Cola Classic | | | |19.8% | | | |Pepsi-Cola | | | |17.9% | | | |Diet Coke | | | |8.9% | | | |Diet Pepsi | | | |5.7% | | | |Dr Pepper | | | |4.5% | | | |Sprite | | | | |3.| | | | | | | |7%| | |7Up | | | | |3.| |...
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