Cadbury Beverages Inc. Case Analysis
October 3, 2010
Cadbury Beverages, Inc. Case Analysis
Marketing executives at Cadbury Beverages, Inc. want to re-launch the following brands: Crush, Hires, and Sun-Drop soft drinks. However, Cadbury has seen several challenges arise in the eve of their next attempt to lead the market. Senior marketing executives decided to focus generally on the Crush brand of fruit flavored carbonated beverages. The key issues that were foreseen by Cadbury executives were the rejuvenation of the bottling network, figuring out brand equity, and develop new positioning. Lastly, there are numerous opportunities available for Crush to take advantage of that which will be discussed in this case that deal with new positioning towards a different segment and a much needed rejuvenation of the bottling network. Industry Structure
There are three major players which are all very important in the production and distribution of carbonated soft drinks. They are concentrate producers, bottlers, and retail outlets. There are over 40 concentrate producers yet there are just three that dominate this industry. They are: Coca-Cola, PepsiCo, and Dr Pepper/Seven Up. The bottlers convert the basic flavor in carbonated soft drinks then package the drink in bottles or cans and in turn sell specific brands of the concentrate producers. Franchised bottlers’ package and distribute in a defined area and are only allowed to represent non-competitive brands. Retail channels include supermarkets, convenience stores, vending machines, fountain services, and small retail outlets. Supermarkets will account for about 40% of sales (Kerin, 2007). Industry Economics
Concentrate producers have a gross profit of 86% (regular) to 87% (diet) and a pretax cash profit of 16% (regular) to 30% (diet) while bottlers have a gross profit of 43% (diet) to 46% (regular) and pretax cash profit of 12% (diet) to 15% (regular)....