ppbm case analysis: snapple
TRANSCRIPT
SnappleCase AnalysisSubmitted by:MEEMANSA VAJPAYEE PUNYATA TULI ARJUN RAO PGP/14/095 PGP/14/167 PGP/14/267 AYUSHI AGRAWAL PGP/14/141 MANGESH PATIL PGP/14/217 MAHTAAB KAJLA PGP/14/280
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Product Policy & Brand Management| Snapple
IntroductionSnapple History
Founded by Arnie Greenberg, Leonard Marsh, Hyman Golden for selling natural apple juice
Developed a network of independent distributors
Increased advertising expenditure and focused on expansion in west coast
Mantra everything should and would be natural and real.
Sold to a Thomas H. Lee Company a leveraged Buyout
1972
1992
1994
Outsourced production and product development
Focus on growth of business via professional management than getting acquired
Relied on offbeat advertising and public relations
Led the growth in alternative beverage category with a share of 30%-40%
Lee sold the company to Quaker Oats for $1.7 billion
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Product Policy & Brand Management| Snapple
4 Ps for SnappleProduct Started as bottled apple drink Extended into carbonated drink, fruit flavored iced teas, diet juices, sports drink, Vitamin Supreme Premium pricing on successful products made up for the losses Independent distribution system Network of 300 small, family owned distributors Convenience chains, pizza stores, food service vendors, gasoline stations, mom-and-pop stores Primarily concentrated on Cold Channel Warm channel supermarkets accounted for only 20% of the sales nationally Promoted as 100% natural Initial advertisement with tennis star Ivan Lendl was poorly received Later a mix of public relations and advertising Wendy Kaufman a real person became the spokesmodel Eccentric personality and brash New York attitude Sponsorship of radio programs of Howard Stern and Rush Limbaugh Snapple convention in Long Island Snapple themed fun and games
Price Place
4 Ps PromotionPage 3
Product Policy & Brand Management| Snapple
Quaker and Snapple Synergies & Differences Synergies Utilize Snapples cold channel for Gatorade in which it was weak Snapple to benefit from Quakers packaging, supply chain expertise and information system abilities Snapple to gain more exposure in the warm channel Gatorade strong in U.S south while Snapple in Northeast and west coast Quaker wanted to establish itself strongly in the beverage industry
Differences in imageryGatorade Lifestyle brand Snapple Fashion brand
Beverage for those Fashion sensitive, who worked out quirky or played vigorous sports Stable lifestyle On the edge
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Product Policy & Brand Management| Snapple
Steps taken by Quaker Association with controversial people like Howard Stern and Rush Limbaugh was terminated Wendy Kaufmans role also terminated 300 distributors offered to relinquish their Snapple supermarket account in exchange for distribution of Gatorade to rest of the accounts Quaker earned distributors ire due to this policy and no channel rationalization was achieved Snapple introduced in large pack sizes and in greater assortments Limitations in terms of retail display space in cold channel and distributor trucks Snapple more of a fashion brand than a utilitarian brand like Gatorade. Best consumed in 16-ounce single serve containers
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Product Policy & Brand Management| Snapple
Issues with Quaker Tactics
Reproducing Gatorades strategy for Snapple
Brand dilution of Snapple
Change of Package size
Conflict between Quaker's management and the entrepreneurial spirit of Snapple
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Product Policy & Brand Management| Snapple
Problem Statement and Issues
Acquisition by Quaker and subsequent changes made consumers feeling betrayed
Dismaying distributors which were responsible for growth in cold market impacted overall business
Replacement of spokesperson "Wendy produced bad press and was still haunting the company
Sales800 700 600 500 400 300 200 100 0 1980 1985 1990 Years 1995 2000 Sales
To devise a plan so as to revitalize the Snapple brand after 3 long years of declining sales. (Overall declining sales upto 35% i.e. $674mn (94) to $440mn (97))
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Product Policy & Brand Management| Snapple
Sales ($millions)
Exhibit 6 Analysis
Snapple having strong connect with the consumers Doing things differently by being real and human Seen as quirky, offbeat, authentic, fun, personal Strong individualistic ethos Means a lot of things to a lot of different people Used by average people but the brand makes them to think themselves as offbeat Perceived as reaction to modernity Seen in experiential terms more variety and combinations than competitors For people who are neither too serious about health nor careless about what they eat/drink in-betweenity
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Product Policy & Brand Management| Snapple
Exhibit 6 Analysis
Reasons for decreased consumption Natural attrition due to inefficient distribution More health conscious users Doubts about authenticity Loss of fashionability - Weak product differentiation - More like a fashion water than an established brand - Lack of compelling reason for use - Absence from daily rituals and routines Negative publicity
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Product Policy & Brand Management| Snapple
Modus Operandi
Increasing customer base Acquiring new customers Retaining vulnerable customers Recapturing lost customers
Increasing product consumption Expanding brand awareness: Communication about appropriateness & advantages of consuming Snapple
Entering new markets Diversifying into new beverage categories such as sports drinks, chocolate beverages etc.
Short Term
Long Term
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Product Policy & Brand Management| Snapple
Recommended Marketing MixProduct 16 ounce single serve container size for existing and loyal customers (Bolster Fading Associations) & 10 ounce containers for new/potential users Attractive new packaging to reflect fun element (Exhibit 6) Gradually phase out the flavors that are low in demand Must maintain same pricing in the premium segment Try to retain the cold distribution channels & gradually build upon relationship with warm channels i.e. supermarkets Wide availability & maintaining variety at retail locations (Exhibit 6) Better links to distributors for proper understanding of reorder volume & consumer preferences Promotion should focus on 100% Natural & Healthy message & fun & quirky aspect of Snapple (Exhibit 6) (Bolster Fading Associations) Create a popular character that reflects brands personality (Create New Associations) Increase advertising expenses to revitalize the brand Run a campaign aimed at countering the rumors (Neutralize negative associations)
Price Place 4 Ps PromotionPage 11
Product Policy & Brand Management| Snapple
Q&A
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Product Policy & Brand Management| Snapple