Dr Pepper Snapple case analysis
TEXAS A&M UNIVERSITY CORPUS CHRISTI
Case 1
Dr Pepper-Snapple Inc: Energy Drinks
MKTG 5320
Wesley Gordon
Introduction
In the ever changing world of customer needs and expectations Dr Pepper-Snapple was faced with an increased customer focus on energy drinks. This area, when exploited correctly, is a high growth and high margin beverage business. In early September 2007, Andrew Baker had his marching orders. He emerged out a long discussion about entering the energy drink business and off he went.
First let’s understand that an energy drink simply does as its title suggest, gives the consumer energy. This is accomplished most of the time with caffeine from a guarana bean. Some of the other players in this market also use taurine, ginseng, carnitine, and B Vitamins Let’s also take a look at Dr Pepper Snapple Group Inc. They are a major integrated brand owner that also performs bottling and operates strong distribution capability in the United States, Mexico, Canada, and the Caribbean. They also have a business model that differs from its competitors. They are a major carbonated soft drink (CSD) business but they put theretheir focus and margins in there ready to drink market (RTD). This investment in the RTD sector gives them a strong leverage point when evaluating entering the energy drink market, which is strong with RTD products.
Problems Dr Pepper- Snapple needs to make a strategic decision as to whether or not they want to enter the energy drink business and if so where and how do they want to proceed. If they proceed they will need a strong targeted marketing plan, determine how to leverage their strengths in the market, and determine if their short comings will impact the introduction of a new product line.
Alternatives
1. Leverage and expand their Accelerade RTD product line. In a rapid response to competitors they created Accelerade RTD, could this be expanded.
2. Introduction on New Product Line: Leverage the entire
Case 1
Dr Pepper-Snapple Inc: Energy Drinks
MKTG 5320
Wesley Gordon
Introduction
In the ever changing world of customer needs and expectations Dr Pepper-Snapple was faced with an increased customer focus on energy drinks. This area, when exploited correctly, is a high growth and high margin beverage business. In early September 2007, Andrew Baker had his marching orders. He emerged out a long discussion about entering the energy drink business and off he went.
First let’s understand that an energy drink simply does as its title suggest, gives the consumer energy. This is accomplished most of the time with caffeine from a guarana bean. Some of the other players in this market also use taurine, ginseng, carnitine, and B Vitamins Let’s also take a look at Dr Pepper Snapple Group Inc. They are a major integrated brand owner that also performs bottling and operates strong distribution capability in the United States, Mexico, Canada, and the Caribbean. They also have a business model that differs from its competitors. They are a major carbonated soft drink (CSD) business but they put theretheir focus and margins in there ready to drink market (RTD). This investment in the RTD sector gives them a strong leverage point when evaluating entering the energy drink market, which is strong with RTD products.
Problems Dr Pepper- Snapple needs to make a strategic decision as to whether or not they want to enter the energy drink business and if so where and how do they want to proceed. If they proceed they will need a strong targeted marketing plan, determine how to leverage their strengths in the market, and determine if their short comings will impact the introduction of a new product line.
Alternatives
1. Leverage and expand their Accelerade RTD product line. In a rapid response to competitors they created Accelerade RTD, could this be expanded.
2. Introduction on New Product Line: Leverage the entire