Snapple Case Analysis

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SNAPPLE – An Introduction

Started in 1972 by selling all-natural apple juice
“100% Natural”- the business mantra
Alternative beverage category drink
Product portfolio includes juices, iced tea, lemonade, water By 1994, had sales revenue around $674 m
Distributed mostly through cold channels
Promotion of Snapple was an offbeat blend of PR and advertising Had huge success by creating a spokesmodel for the brand: Wendy Kaufman Brand promoted through radio programs by Stern who humorously promoted the brand Promotion used to be natural and real

After huge success for many years, Snapple brand was sold to Quaker in 1994 for $1.7 b

QUAKER ENTERS THE PICTURE

A food company managing four areas of business: grain-based foods, bean-based foods, pet foods, and beverages Got huge success with Gatorade, contribution of $1.1 b of company’s $5.95 b turnover Distributed mostly through warm channels

Acquired Snapple to extend the beverage business product portfolio After suffering loss for 4 continuous years, sold Snapple to Triarc Beverages for $300 m

WHAT WENT WRONG WITH THE ACQUISITION OF SNAPPLE BY QUAKER OATS

Quaker – with only Gatorade, wanted to stave of acquisition – Snapple would give broader lineup to capture economies of scale Quaker's corporate temperament was perfectly attuned to the achievement-oriented message of Gatorade But Snapple wasn’t about accomplishing an objective; it was about adding a little whimsy to the humdrum and the everyday. The number of flavors was cut back

Packaging was redesigned
Advertising campaigns were scrapped
Biggest mistake Quaker Oats made was changing Snapple's distribution - same distribution chain as Gatorade the loss of the supermarket accounts made the independent distributors very unhappy

IMPLICIT REASONS FOR FAILURE

Vital interplay between the challenge a brand faces and the culture of the corporation that owns it When brand and culture fall...
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