Dr Pepper - 7up, Inc. - Squirt Case

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Dr Pepper/7Up, Inc
Squirt® Brand

The brand manager of Squirt, Kate Cox has been tasked with coming up with the brand’s annual advertising campaign. Kate met with the brand’s advertising agency to discuss some ideas for new market targeting, and product positioning because Squirt’s recent case sales volume has fallen, as well as increased competition, and a change in many of the markets that Squirt currently serves. Currently Squirt’s total market by ethnicity shows that 73% of its market is Caucasian, 15% African-American, and the remaining 12% are Hispanic. One of the major problems with declining sales is the increase of Hispanic communities in markets that were previously popular markets for Squirt. So what does Squirt need to do to turn this around? The problem facing Squirt is how they can effectively position their brand to increase sales as well as capture the Hispanic consumer market without spreading their advertising dollars too thin.

Carbonated Soft Drink Industry
The Carbonated Soft Drink (CSD) industry is enormous. In 2000, more Americans drank soft drinks than water. The production and distribution of soft drinks involve concentrate producers (basic flavors), bottlers (add sweetener and carbonated water), and retailers. Of all the retailers available for distribution to customers, grocery stores and supermarkets account for about 31% of sales. There are three major competitors in the soft drink market (Coca-Cola, 44.1%; Pepsi-Cola, 31.4%; Dr Pepper/Seven Up, 14.7%). Each competitor spends a lot of money on advertising their brand through promotions, and consumer price discounting. Concentrate producers and bottlers usually share advertising costs because bottlers can target markets locally while producers focus on the bigger picture.

While colas are still the most popular in the CSD Industry, they are starting to lose ground. Flavored soft drinks are beginning to become more popular due to the changes in the U.S. population make-up (30% increase in sales from 1990-2000). Most CSD consumers are aged 20-49. Of these consumers, the majority of CSD consumers are teenagers or young adults ages 12-24. Also, Hispanics and African-Americans make up the majority of ethnic or racial groups that consume CSD’s. These populations often favor flavored beverages over colas. According to an article provided in the case, within the next ten years the Hispanic youth will become the largest youth population (22% increase), while the population of white youth will decrease by 5%. Squirt Brand

The Squirt brand was born in 1938 in Phoenix, Arizona. It is known for its light and refreshing taste and low sugar content. The owner, Herb Bishop, sold Squirt to Brooks Products, a bottler. Brooks Products changed the formula, logo, and repositioned the brand as a mainstream soft drink. Brooks Products also introduced Diet Squirt, which was the first soft drink in the U.S. to be sweetened with Aspartame. Squirt was eventually acquired by Cadbury Schweppes PLC who assigned it to their Dr Pepper/Seven Up division in 1995.

Squirt does not spend as much as their competitor’s on media advertising, but instead spend more on retail, trade, and consumer promotions, as well as cooperative advertising arrangements. Currently Squirt has the highest customer awareness among their competitors. Since the name has been around since 1938 a wider range of consumers are aware of the brand. Squirt’s target market is adults ages 18-34, and they positioned themselves in such a way as to target individuals that are fun-loving and individualistic. When reviewing their current media advertising campaign, many focus groups thought that their television commercials and advertisements were juvenile. Advertising Agency Recommendations

The brand manager of Squirt, Kate Cox worked with the companies advertising agency, Foot, Cone & Belding to come up with an updated positioning strategy , and target market....
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