Action Plan: Dr Pepper Snapple Group, Inc. Energy Beverages
Marketing Mix 4ps.5
Product Line and Positioning.6
Advertisements and Promotion.6
The history of Dr Pepper Snapple Group Inc. is very complex, but all started when Jean Jacob Schweppe invented the world’s very first carbonated mineral water in 1783. A young pharmacist, Charles Alderton from Waco, Texas made Dr Pepper in 1885. It was only sold in the pharmacy where Alderton worked. In 1970 in the New York -region health food store owners invented a new apple soda, Snapple. The Unadulterated Food Corporation owned Snapple and later it becomes Snapple Beverage Corp. Within the years companies were growing and ownerships have been changed and Dr Pepper Snapple Group Inc. has formed from different beverage companies. Today Dr Pepper Snapple Group Inc. is one of the most known and largest non-alcoholic beverage producers in the U.S. Dr Pepper Snapple Group Inc. is in both the flavoured carbonated and the non-carbonated soft drink businesses. The most known brands are Dr Pepper, 7UP, A&W and Canada Dry. In 2007 Dr Pepper Snapple had an 18, 8 % share of the U.S. carbonated soft drink market segment.
Dr Pepper Snapple was the only big non-alcoholic beverage company without its own energy drink in 2008. Basically Dr Pepper Snapple Group Inc. was struggling with a problem whether it should produce its own energy beverage or not. The main issue was would the launch of a new energy beverage be profitable and a wise investment for the future? Moreover, how can the new energy drink compete with other huge brands? There are several difficulties and elements to evaluate before entering the energy beverage market, such as the market itself, competitors, consumer behaviour and marketing. Analysis
The energy beverage market is one of the fastest growing and most innovative segments of the current beverage market. Red Bull, Monster Energy, Rockstar and hundreds of similar positioned brands had estimated sales of 6.2 billion dollars in 2006. From 2001 till 2006 the annual growth rate of the energy beverage market was 42.5%. However, analysts are now projecting an average annual growth rate of 10.5% from 2007 till 2010. This, we conclude, is due to market maturity, increased price and increased competition. In addition, one should also note that consumers in this market only choose up to 1.4 different brands, which tells us the market is very loyal to existing brands. If a brand can build and maintain a sufficient customer base, they will benefit from loyal recurring buyers. The difficult part however is getting these loyal customers. Due to the above mentioned conditions, we find it a viable statement to describe the energy beverage market as profitable but tough.
The market can be segmented through three main attributes; demographic, geographic and psychographic. As for demographic, the most profitable customers are male between the age of 12 and 34. However, we can’t say anything towards the income level, race and ethnicity of the consumers due to lack of information. We further believe that energy beverages are mostly consumed in urban and suburban areas. If we in turn look at regions, we can state that the main consumption of energy beverages takes place along the west and east coast of the US. Psychographic segmentation shows us that the main parts of the market, the greatest consumers of energy beverages, are gamers, students and athletes. These groups of people look for an energy boost, to improve mental alertness, as refreshment and for the taste.
The main competitor in the energy beverage market is Red Bull. The brand was introduced...