Presentation on theme: "CADBURY BEVERAGES Miles Anderson Steven DiPalma Jesse Glendinning"— Presentation transcript:
1 CADBURY BEVERAGES Miles Anderson Steven DiPalma Jesse Glendinning Patrick NathansonCourtney PopeChandra Simmons
2 SUMMARY Cadbury Schweppes – world’s first soft drink maker Fourth largest soft drink marketer in United StatesCoca-Cola (1), PepsiCo (2), Dr. Pepper/Seven Up (3)3.4 % carbonated drink market share1989 acquisition – Crush would account for 20 % of Cadbury Beverage salesProduction and distribution: concentrate producers, bottlers, and retail outletsPrincipal retail channels: supermarkets, convenience stores, vending machines, fountain services, and small retail outletsSupermarkets account for 40 % of sales – key to a successful marketing effort
3 SUMMARYCompetitors in orange-flavored soft drinks: Mandarin Orange Slice (PepsiCo), Sunkist (Cadbury), Minute Maid Orange (Coca-Cola)$26 million spent on advertising by four major brands84 % of spending from Minute Maid and Mandarin OrangeCrush spent less on advertising with fewer vehiclesSpot Television, newspapers, outdoor signageVery little pricing difference between four major brands (no more than one cent)Variety of merchandising promotionsDealer Loaders, sponsorships, coupons, sweepstakes, on-package promotions
4 SUMMARY January 1990 – strategic marketing decisions for Crush brand Focus intitial attention on orange flavorReesetablish bottling network – make Crush available in 75 % of total sales markets
6 Problem DefinitionPurchased Crush soft drink brand from Proctor & Gamble for $220 million.Manage the relaunch of Crush.Three issues:Reestablishment of a bottling network.New positioning stance that incorporates flavor line.Development of an advertising and promotion program.In October of 1989, Procter & Gamble sold all the Crush brand worldwide trademarks to Cadbury Schweppes PLC for a sum of $220 million. Cadbury Beverages, Inc. is the beverage division of Cadbury Schweppes PLC and is in charge of managing their new acquisition of the Crush soft drink brand.Kim Feil was assigned the responsibility for managing the relaunch of the Crush soft drink brand. There are three issues that need to be addressed before the relaunch: the reestablishment of a bottling network, a new positioning stance that includes the Crush flavor line, and the development of an advertising and promotion program.
8 COMPANYCadbury Beverages, Inc. is the beverage division of Cadbury Schweppes PLC.Sold in 110 countries.Cadbury Schweppes PLC headquarters in London, England.Cadbury Beverages, Inc. headquarters in Stamford, Connecticut.World’s first soft drink maker in 1783.Owns Canada Dry, Schweppes, Sunkist, among others.3.6% market share in soft drinks.First soft drink sold was artificial mineral water by Swiss native Jacob Schweppe in London.Sells Canada Dry ginger ale (TOP SELLING GINGER ALE), Schweppes tonic water (TOP SELLING TONIC WATER), Sunkist orange soda, among others
9 SUNKIST CRUSH CONSUMERS Target Market Teens, 12-24 Households with 3-4 childrenPositioning“Teens on the Beach”“Drink in the Sun”Target MarketTeens, 13-29Households with 3-5 childrenPositioning“Don’t just quench it, CRUSH IT”
10 COMPETITORS Coca-Cola (Minute Maid Orange) Top 10 Soft Drink BrandsMKT SH1. Coca-Cola Classic19.8%2. Pepsi-Cola17.9%3. Diet Coke8.9%4. Diet Pepsi5.7%5. Dr. Pepper4.5%6. Sprite3.7%7. Mountain Dew3.6%8. 7Up3.2%9. Caffeine-free Diet Coke2.5%10. Caffeine-free Diet Pepsi1.6%Top 10 Brands71.4%Other Brands28.6%Total Industry100.0%Coca-Cola (Minute Maid Orange)PepsiCo (Mandarin Orange Slice)Dr. Pepper/Seven UpCoca-Cola, PepsiCo and Dr. Pepper/Seven Up are the three leaders in the soft drink market.Coca-Cola’s Minute Maid Orange and PepsiCo’s Mandarin Orange Slice are the only orange flavored soft drinks in the market.Slice (21% in 1989)Minute Maid (14% in 1989)Sunkist (14% in 1989)Crush (8% in 1989)
11 SWOTStrengthsHigh name awareness in markets served by existing and new bottlersHighest orange brand awareness in key metropolitan areas- (Seattle, San Francisco, New York City, Los Angeles, Chicago, BostonWeaknessesPoor bottling network due to Procter and Gamble’s switching to warehouse systemChanging brand positioningPoor Diet SalesMarket coverage of only 62%OpportunitiesIncrease Orange Crush market sharesIncrease market coverage once bottling network is re-establishedMarket coverage would increase to 75% once the bottler network is establishedThreatsThree big competitors (Sunkist, Mandarin Orange Slice, and Minute Maid Orange) all have higher brand market sharesLow loyalty compared to other competitorsEvery other competitor in the category has higher market coverage percentage
12 COMPANY High name awareness Highest orange brand awareness Poor bottling networkSpend less on advertising and used fewer advertising than two biggest competitors (Minute Maid Orange and Mandarin Orange Slice)
13 COMPETITIONMandarin Orange Slice and Minute Maid Orange have highest brand loyaltyMandarin Orange Slice and Minute Maid Orange two biggest competitorsEvery other competitor in the category has higher market coverage percentageEvery other competitor has higher brand market shares
14 CUSTOMERSLatest positioning targeted towards ages with a tagline of “Don’t just quench it, Crush it”Household size of purchaser is 3-5 people with children at home2 liter accounts for 64% of sales while cans account for 31% and 5% is other46% customer loyalty
15 ALTERNATIVE COURSES OF ACTION Develop an efficient distribution network (bottlers, retailers). This is one of the key success factors in the soft drink industry. Crush is targeting teens with its current positioning; we suggest reworking this position to target mainly young families with children. With a target market of Crush can fight for market share without cannibalizing that of Sunkist. We also suggest that Crush return to a position that emphasizes on its great natural taste. This would appeal to the young family and ensure once again that Crush was not cannibalizing Sunkist teenage market.
16 ALTERNATIVE COURSES OF ACTION Crush ran similar ads in the early 80’s and had success with the young family market. New ads would focus on the great natural taste of crush and be run in a variety of media with special attention given to point of purchase displays, end cap shelving, and coupons and discounts for the customers. (Given 60% of sales come from supermarket sales) Crush could also run an ad campaign that depicts alterative times and places to enjoy orange soda and would focus on increasing the orange soda market s share of 3.9%.This would need to be done carefully however to avoid having an all out price war with some of the larger soda companies, (coke and pepsi).
19 3-WHAT IS CADBURY BEVERAGES RELATIVE COMPETITIVE POSITION IN THE U. S 3-WHAT IS CADBURY BEVERAGES RELATIVE COMPETITIVE POSITION IN THE U.S. SOFT DRINK INDUSTRY? IN THE ORANGE CATEGORY? Cadbury Beverage has a strong competitive position in the Soft Drink Industry. It is the world's third largest soft drink marketer behind Coca Cola and PepsiCo. Cola flavored sodas do account for 65.7% of market share, however orange flavored soda accounts for 3.9%. There are three other brands that compete against Cadburys Sunkist and Crush to dominate a large portion of the orange-flavored soft drink sales. These competitors include PepsiCo's Mandarin Orange Slice, and Coca-Cola's Minute Maid Orange. in 1989,Cadburys Orange Sodas were not as high on market share as their competitors,Sunkist (14%) and Crush (8%), Slice (21%) and Minute Maid Orange (14%). Crush postitioned themselves to teens ages using the statement " Don't just quench it, Crush it" to attract their consumers.
20 4-BASED ON YOUR ASSESSMENT OF THE 4 SOFT DRINK INDUSTRY, THE ORANGE-FLAVORED CATEGORY, AND THE COMPETITIVE SITUATION OF CADBURY BEVERAGES AND ORANGE CRUSH, WHAT IS YOUR RECOMMENDATION FOR POSITIONING ORANGE CRUSH?Crush is targeting teens with its current positioning; and its sister company Sunkist is targeting teens ages we suggest reworking Crush's position to target mainly young families with children. We believe that with a target market of Crush can fight for market share without cannibalizing that of Sunkist. We also suggest that Crush's reposition emphasizes its great, natural, taste. We believe this would appeal to the young family and ensure once again that Crush was not cannibalizing Sunkist's teenage market.