Marketing Case Study: Analyzing Dr. Pepper Snapple Group's Strategy

This case study examines the strategic decisions of Dr. Pepper Snapple Group, Inc. regarding the launch of an energy drink. The analysis begins by defining the problem, which involves the company's interest in entering the rapidly growing energy beverage market in the USA, Mexico, and Canada. The case study then presents and evaluates two main alternatives: launching a new energy drink product or improving existing product lines. The evaluation considers market opportunities, target demographics (12-34-year-olds), pricing strategies, and packaging options (0.5-liter aluminum bottles). The study recommends launching the new energy drink, highlighting the potential to reach a large consumer base and leverage the company's strong marketing and distribution channels. The implementation section outlines key marketing aspects such as promotional campaigns, social media marketing, and product availability in various retail outlets. The case study emphasizes the importance of affordable pricing, attractive packaging, and effective distribution to ensure the successful introduction of the energy beverage.

CASE STUDY ON DR. PEPPER SNAPPLE GROUP,
INC.
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Contents
Definition of the Problem:.........................................................................................................3
Available Alternatives:...............................................................................................................3
Evaluation of the alternatives:....................................................................................................4
Making a choice:........................................................................................................................4
Implementation:.........................................................................................................................5
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Definition of the Problem:
Dr. Pepper Snapple Group, Inc. is a well-known brand of bottled beverages in the USA,
Mexico, and Canada. The Company mainly focuses on the non-alcoholic beverages. The
company generates 89% of the net sales from the USA only. In 2008 the company has
decided to launch an energy drink in the existing market.
The organization is exploring the option to come up with a new sort of energy beverage in the
market. The decision is being evaluated by the brand manager of Dr. Pepper Snapple Group;
Inc. Accordingly, the brand manager is looking into options like launching the Accelerade
RTD brand way back in 2007. The energy beverage market is considered the fastest-growing
market in the USA. The company has good market share in the USA and a well-known brand
in the bottled beverage. These scenarios inspired the organization to introduce a new branded
product into the energy beverage market. Now, the company is considering various strategies
to introduce the energy drink into the targeted market.
Available Alternatives:
There are certain alternatives available in the market that the organization can pay attention
to, for exploring the market opportunity in an optimum manner. Accordingly, the first
alternative available to Dr. Pepper Snapple Group, Inc. is to launch an energy based beverage
into the existing market of USA, Canada, and Mexico wherein the company operates
extensively. The organization has integrated brand to its credit and is focussed on the high
growth opportunities along with high margin categories in the market. The business has a
strong distribution capacity to make them available to the targeted market. Moreover, Inc. has
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concentrated on the presence of high margin channels like the convenience stores and the
independent retailers. In this way, the offering of the new product would provide an
opportunity to have attractive return on the investment.
The second alternative to the company would be to not introduce any such new product in the
existing market, as there is already a handful of such product available in the market. Again
Dr. Pepper Snapple Group, Inc. operates in a competitive market. So it needs to be cautious
as a wrong strategy would hurt its corporate objectives. And it would apparently make way
for its competitors like Red Bull, Rock star, Monster Energy, and others. So it would be
better for the organization to continue with the improvement of the product line, like
introducing a new variant. This would also sustain the interest of customers.
Evaluation of the alternatives:
The first alternative available to Dr. Pepper Snapple Group, Inc. is to launch a new sort of
energy based beverage. There is ample opportunity available in the market. The product
would be targeted to the population aged between 12-34 years as they account for 70% of the
beverage consumption. The organization can enter into negotiation with the various
supermarkets and mass merchandisers for a suitable package. A projected retail selling price
at worth $2 per single served package would be attractive to the market. The company has
also concentrated on the packaging aspect of the product by presenting the drink in a 0.5 litre
single served aluminium bottle to grab the attention of the targeted market.
The second alternative for Dr. Pepper Snapple Group Inc. is to concentrate on its existing
product, like improving its product for having a stronghold on its targeted market. It seems
that it would be favourable for the organization to re-launch the Accelerade RTD. The
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product is to be introduced along with a new variant. This would definitely help to get the
attention of the fitness enthusiasts. The targeted segments of fitness enthusiast are 35 million
odd Americans. They could also explore reduction of the existing prices, as it is expensive
compared to the other products.
Making a choice:
It seems that keeping note of the present scenario both the alternatives are suitable for Dr.
Pepper Snapple Group, Inc. but the first alternative is preferable. It is held that the
organisation needs to introduce a new energy based beverage. In this way, the organization
would be able to enhance its brand horizon. The product would have the potential to reach
out to 153 million beverage users, existing in the market. Further Dr. Pepper Snapple Group,
Inc. is a master strategist and market leader in its segment. The company has the right
network of marketing and distribution channels. It would be helpful to rightly place the
product amidst widespread competition in the market.
Dr. Pepper Snapple Group, Inc. has the right option to place the product in an attractive
container. The company may make it available to the nearby convenience stores and the
independent retailers. This would apparently help the organization to occupy a respectable
market share, on the lines of its competitors like Red Bull, Rockstar, Monster Energy and
others. The attractive package of single served 0.5-liter aluminium bottle could be of $2. It
will be handy for the youngsters from the age range of 12-34 years, forming the main
targeted segment. Moreover, for Dr. Pepper Snapple Group, Inc. various promotional
campaigns like that of social media marketing can be used.
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Implementation:
Dr. Pepper Snapple Group, Inc. is about to launch a new energy based beverage in the
market. To contemplate the same, the organization needs to take into account certain
marketing aspects. This could be in terms of a strong promotional campaign and improved
product. Affordable pricing coupled with attractive and stylish packaging would also be quite
helpful in this case. The company needs to run successful campaigns to launch the product
after its development. This could be done by taking help of the personal selling strategy at the
supermarkets and selected convenience stores to arouse the interest of the customers. The
aspect of social media marketing would also be helpful to grab the attention of the young
population, who form the main targeted segment. The distributors have to ensure energy
beverage availability in a convenient manner for all the customers. The new energy based
beverage need to be available at the independent retail stores also. This would help the
targeted segment to access the product easily.
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