Cadbury Beverages, Inc. Crush Brand CHECK -Market share for competitor analysis vs. corporation analysis -Diamonds vs. circle bullet points -Competitor analysis – Dr. Pepper/7UP? By: Steven Gutowitz Grant Marlowe Josh Winkler 1

Summary Cadbury Schweppes PLC is the world’s third largest soft drink marketer. Total annual sales in 1989 were $4.6 billion. Primary Competitors include PepsiCo. and Coca-Cola. PLC acquired the Crush carbonated beverage brand in 1989 for $220 million. 3 distribution channels involved in carbonated soft drink sales. (Concentrate Producers, Bottlers, Retail Outlets.) Orange Flavor soda accounts for 3.9% of soft drink sales. Cadbury Schweppes faces the challenge of ‘re-vitalizing’ the Crush Soft Drink Brand. 2

Flavors • Crush Frozen Orange Dream • Crush Tropical Punch[5] Crush Fruity Red[6] • Crush Ginger Beer • Crush Grapefruit • Crush Grape • Crush Lemon[7] • Crush Lemon-Lime[5] • Crush Lime[5] •Crush Nectar Crush Orange[5] • Crush Peach[5] • Crush Peach Sour[6] • Crush Pear • Crush Pineapple[5] • Crush Pink Grapefruit[6] • Crush Red Cream • Crush Red Licorice[6] • Crush Root Beer • Crush Sarsi • Crush Soda Water (Kuwait, 1970s–1990s) Crush Sour Apple (briefly offered in 2005) • Crush Strawberries 'n' Cream • Crush Strawberry[5] • Crush Strawberry Lemonade • Crush Wild Cherry Cola[7] • Crush Watermelon • Diet Crush Cream Soda • Diet Crush Grape\ 3

Primary Problem Cadbury Beverages, Inc. has taken on the challenge of trying to rejuvenate the bottling network for Crush soft drink brand. 4

Secondary Problems Figure out the brand equity of Crush Developing a new advertising and promotion program Build relationships with bottlers Increase advertising and promotional expenditures 5

Industry Background There are 3 main actors in the production and distribution of the soft drink market: Concentrate Producers: 40 concentrated producers in the United States 82% of the industry sales are dominated by Coca-Cola, PepsiCo and Dr. Pepper/Seven Up Retail Channels: Supermarkets: Account for 40% of carbonated soft drink industry sales Other retail channels: Convenience stores, vending machines, fountain service, and thousands of small retail outlets. Bottlers: Approximately 1,000 bottling plants in the United States covert flavor concentrate into carbonated soft drinks. Either owned by concentrated producer or franchised to sell the brands of concentrated producers. Franchise bottlers can: Package and distribute product is defined territories. Not allowed to market a directly competitive major brand. 6

SWOT Analysis STRENGTHS WEAKNESSES OPPORTUNITES THREATS 4th Largest soft drink marketer in the US. High name awareness in the markets served by existing and new bottlers. High brand awareness in big cities WEAKNESSES Possible cannibalization with Sunkist Low advertising compared to competitors Low market share Low market coverage (one more) OPPORTUNITES American consumers drink more soft drinks then tap water. Market for diet products has increased over the years Many different ways to advertise and promote THREATS More than 900 registered brand names for soft drinks in US. Cola accounts for slightly less than 2/3 of total carbonated soft drink sales Entrance of PepsiCo Mandarin Orange Slice could take market share. Minute Maid and Mandarin Orange slice accounted for 84% of all advertising expenditures in the orange category. WEAKNESSES Market coverage: 62% everyone else over 80% Market share: 7.5% everyone else is over 14% 7

Consumer Analysis Married women with children under the age of 18. Respond favorably to price. (use of point-of-sale promotions, displays, etc.) Purchases are somewhat seasonal. Sales are slightly higher in the summer months Diet products are more pronounced among consumers over 25 years old while teenagers and younger consumers drink regular soft drinks. 8

Variety of Merchandising Promotions Used Competitor Analysis Market Share PepsiCo- Mandarin Orange Slice=20.8% Cadbury- Sunkist= 14.4% Coca Cola- Minute Maid Orange= 14% Cadbury- Orange Crush= 7.5% Position -Minute Maid Orange- emphasis on its orange flavor (18-34) -Sunkist- focused on the teen lifestyle (12-24) -Orange Slice- focused on the contemporary youth culture (18-24) -Crush- focused on their bold imagery with thirst quenching benefits (13-29) Variety of Merchandising Promotions Used -“Dealer loader” is a premium given to retailers -End-of-aisle displays/other types of free standing displays -Shelf banners -Sponsorships of local sports and entertainment events, plastic cups and napkins featuring the brand logo -Coupons, on-package promotions, and sweepstakes Market Share Major competitors sold both regular and diet orange flavored soft drinks. Over 70% of sales were regular soft drinks Position Mandarin Orange Slice and Minute Maid Orange both targeted young adults and households without children and accounted for 84% of all advertising expenditures in the orange category. Crush and Sunkist targeted teens and households with children at home. Concentrate pricing between all four competitors differed very little (maybe a cent). The price differential between regular and diet concentrate was virtually the same across all competitors. Dealer Loader= a common form is a display loader such as ice chest, insulated coolers, T-shirts, or sweatshirts which are part of an in-store or point-of purchase display which is taken down and then the premium is given to the retailer. 9

Corporation Analysis Cadbury Schweppes PLC (London, England) Dec. 12th 1989 Cadbury Schweppes PLC (London, England) Beverage Division: Cadbury Beverages, Inc. (Stamford, Connecticut) Product’s Sold Include: Tonic Water, Club Soda, Ginger Ale, Root Beer, Sunkist, Crush, Mott’s Apple Juice. World Wide sales of $4.6 billion in 1989 One of the World’s Largest Multinational Firms. 4th largest soft drink marketer in the United States. 3.4% market share. 10

Additional Questions 3-What is Cadbury Beverages relative competitive position in the U.S. soft drink industry? in the orange category? Bold User Imagery with thirst quenching benefit. Teens 13-29. “Dont Just quench it, CRUSH it.” Two Liter 64%, Cans 31% 11

Odd Facts Clayton J. Howell included the word "crush" in the original soft drink's name to refer to the process of extracting oils from oranges. Crush Cherry made its debut in 2010, continuing Crush's spectacular growth 12

Our Recommendations 1. Re-Establishing the bottling network. 2. Advertising and Promotion Program (Objectives, Strategies, Expenditures) 3. Consumer Advertising Vehicles (Make sure positioning is consistent with previous positioning) 13