In early September 2007, Andrew Barker emerged from a lengthy discussion on the energy beverage market in the United States. As a brand manager for Snapple beverages at the Dr Pepper Snapple Group, Inc., he was charged with assessing whether or not a profitable market opportunity existed for a new energy beverage brand to be produced, marketed, and distributed by the company in 2008. Dr Pepper Snapple Group, Inc. was the only major domestic nonalcoholic beverage company in the United States without a significant branded energy drink of its own. The decision to explore a new energy beverage was made by senior company management as part of a corporate business strategy to focus on opportunities in high-growth and high-margin beverage businesses. After launching a ready-to-drink sports drink, the Dr Pepper Snapple Group, Inc. believed they should put into consideration of introducing a new energy drink beverage. 1. Decision problem:
In the decision process, I am going to explain the key decision issues that Dr Pepper Snapple Group, Inc. will be faced with when launching their new energy drink “Rush.” The first key thing to ask your self (as the decision maker) is when launching a new energy drink will it be profitable? Obviously if your company will not make a profit from launching a new product, it does not seem feasible to do so. Next, if it does seem feasible to do so, as the decision maker, I will need to take initiative and see if top management thinks there is an opportunity that exists in launching Rush NRG drink.
If top management believes that there is an opportunity that exists, I need to think about the marketing strategies for Rush NRG drink. First, I will need to formulate a target market: a group of people that I have decided to aim towards. Target markets can also be grouped by: geographic locations, demographics (age, gender, income, occupation, education, etc.) and psychographics (attitudes, values and lifestyle). Then, I will need to think about the marketing mix. This entails my product strategy, pricing, distribution strategy and the ballpark estimated of advertising. Before launching Rush NRG drink, I will need to come up with the first year’s sales and predictions and see if our drink will be able to compete with the market leader Red Bull. 2. Strategic options:
As the decision maker, in the strategic options section, I will need to clearly outline the strategic choices. As stated above, my company, the Dr Pepper Snapple Group, Inc., will be launching a new beverage called Rush NRG drink. I will need to begin to develop, produce, and market our new brand. During the launching of the new energy drink, I will have to make a few decisions. Will I be targeting all energy drink users, heavy users or adults?
The next step in the strategic options segment is deciding the product line for Rush NRG drink. Should I introduce the brand in a single-serve package or in a multi-pack? What package size(s) should I choose: 8-ounce, 16-ounce, or 24-ounce? Should I offer both versions, regular and sugar-free? How many flavors should be introduced: one or two? After answering these questions, I will have to develop the positioning strategy. What type of ingredients will be used in Rush NRG drink? An opportunity exists to differentiate a new brand on the basis of ingredients. Alternatively, no brand has positioned itself as an adult energy drink. An adult energy drink beverage might require a different drink, such as lower carbohydrates in the product formulation. I will need to decide if the 16.9-ounce single-serve aluminum bottle shape with a resalable screw cap will work for the target market I’m trying to reach.
Lastly, I will have to decide what form of distribution method I would like to penetrate, off-premise or on premise. Off premise has a few different choices and they are: convenience stores, supermarkets and mass merchandisers. When it comes to the marketing aspect, I...