...Vitamin Water, Energy Drinks, other Beverages Case Study 2 The beverage industry has been rapidly growing for many years now. New products are being produced, as well as old products being refined. One of the largest markets thus far, beverages are continuously changing and being tinkered with. We look at a few different types such as, energy drinks, sports drinks, and vitamin-enhanced beverages. With different corporations comes different success factors. Some success factors for the beverage industry consist of rapid growth in category, premium prices, and high profit margins. Coca Cola and PepsiCo have been expanding on numerous different flavors, holding to the same products and production line. By expanding the “line up”, companies can expand their production, as well as profit and the business as a whole. “As consumer preferences shifted during the 2000s, sports drinks, energy drinks, and vitamin- enhanced drinks had grown to become important segments within the industry in 2010.” [Gamble C 76]. Noticing that most of the energy drinks are vitamin based, the growth of these products has been positive. Looking at Exhibit 1, we understand and can see the growth and volume sales over the years between 2005 and 2014. This chart pictures a constant growth based on the growth determined within prior years. The Five-Forces Model of Competition, is a key analytical tool in organizing a model based on buying and selling. The Five Forces are considered to be: firms...
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...Case Analysis of the Alternative Beverage Marketplace Companies around the world are fighting for position in their industries. The completive world of alternative beverages is no different. The companies involved in this epic battle for market share all are challenged with the three questions outlined by Arthur A. Thompson “What’s the company’s present situation? What should the company’s future direction be and what performance targets should we set?” (Thompson, 2012) The development of a strategy for the companies involve in the alternative beverage arena is a daunting one. There are pressing internal and external environmental factors that present significant challenges in the gaining and maintaining of market share with in the industry. The obstacles faced by these organizations include global economic slow downs, dynamic distribution channels, negative press and fickle customer tastes. These companies, however, must remain focused and vigilant to attract customers to their brands. The case study presented by John E. Gamble, Competition in Energy drinks, Sport Drinks, and Vitamin-Enhanced Beverages, outlines the boons and challenges faced by the four leading distributers of alternative beverages around the world. The industry leaders (PepsiCo, Coca-Cola, Red Bull and Hansen Natural Company) in the alternative beverage market are what is know as a strategic group. “A strategic group is a cluster of industry rivals that employ similar competitive...
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...CASE #1 DR. PEPPER SNAPPLE GROUP, INC. ENERGY BEVERAGES DEFINITION OF THE PROBLEM: Dr. Pepper Snapple Group, Inc. is a major integrated brand owner, bottler, and distributor of non-alcoholic beverages in the United States, Mexico and Canada. Recently, Andrew Baker, brand manager for the company, has been tasked with formulating a marketing strategy to determine whether or not launching a new energy beverage would be profitable in 2008. To date, Dr. Pepper Snapple Group, Inc. is the only major domestic non-alcoholic beverage company in the U.S. that did not have an energy drink of its own. The decision to explore the energy beverage market is based on a business strategy that focused on the opportunities in high-growth and high-margin areas of opportunity. A primary concern facing this decision lies in the fact that the energy beverage industry is already established. The problem lies in whether or not it is worth their time and funds to explore a new product and venture into the energy beverage market. Alternatives Essentially, there are two basic alternatives to consider when evaluating this decision: (1) continue business as usual and don’t get involved with the energy beverage industry or (2) enter the energy beverage market. Evaluation of Alternatives In the first alternative, they’d continue to ride their juggernauts. Stick with their established brands and stay the course. It’s important to note...
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...Practice Case 1: Discussion Seminar 2 - Dr Pepper Snapple Group, Inc: Energy Beverages– Kerin & Peterson page 105. Case Questions: How would you characterise the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007? Beverage category: the energy beverage market produced estimated retail dollar sales of $6.2 billion in 2006. Off premise sales through convenience stores, supermarkets and mass merchandisers accounted for 71% of total retail sales in 2006. On premise retailers, such as restaurants and nightclubs, accounted for 29% of total retail sales. From 2001-2006, total energy beverage retail sales grew at an average annual rate 42.5% Industry analysts were projecting an average annual growth rate of 10.5% from 2007-2011. The slower growth rate was attributed to market maturity, increased price and package competition, and the entrance of hybrid energy beverages such as energy water, energy fruit drinks, ready to drink energy teas, and energy colas. Intense competition Competitors: 5 competitors dominate the US beverage market: Redbull (market leader), North America, Hansen Natural Corporation, Pepsi Cola, Rockstar, Inc. and Coca Cola. Consumers: Males between ages of 12 and 34 as they are the heaviest users, most consumed in the afternoon followed by morning consumption. Most consumers drink energy beverages at home, in the car, and at work/school. Channels: convenience stores and off premise...
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...Practice Case 1: Dr Pepper Snapple Group, Inc: Energy Beverages 1. How would you characterise the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007? Energy Beverage Category: Energy drinks provide consumers with a boost of energy and they fall under the category of functional drinks. Functional drinks are non-alcoholic drinks which include ingredients such as herbs, vitamins, minerals, amino acids or other nutritional ingredients. Other functional drinks include sport drinks, teas, fruit drinks and enhanced water drink. DPSG participation → In the US and Canada, Dr Pepper Snapple Group participated primarily in the flavoured carbonated soft drink (CSD) market segment Competitor: The largest non-alcoholic beverage category, after carbonated soft drinks, sport drinks, and bottled water, but the fastest growing one. DPSG participation → their major competitors include Red Bull, Monster Energy, and Coca Cola. Consumers: Average US per capita consumption of energy beverage drinkers increased by 14% since 2004. Predominantly consumed by males aged between 12- 34 during the afternoon or morning. The reasons for consumption include energy boost, mental alertness and taste. Most limit their options to 1.4 different brands which sheds light on strong brand loyalty. DPSG participation → DPSG have an attractive positioning within a large, growing, and profitable market. Channels: Distribution channels include convenience...
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...Why is Red Bull one of the most successful energy drinks in the world? Your essay must explain how and why Red Bull has selected their target market, positioned their product and created a brand that supports their positioning. By: Tegan Effting March 2010 Introduction Red bull is an energy drink; a functional beverage that claims to “give you wings!” It certainly worked for Dieter Mateschitz and Chaelo Yoovidhya, the creators of Red Bull, who have soared into the shared position number 208 on the Forbes list of richest billionaires of 2010 with individual net worths of $4.1 billion self created between the launch date in 1987 and today. So what is it that has made Red Bull one of the most successful energy drinks in the world? Designed to improve stamina, the ingredients of Red Bull boost performance by increasing alertness, concentration and reaction speed, making it the perfect supplement for periods of heightened physical pressure and mental stress. (Simpson J & B Dore, 2008). The drink is a variant of Yoovidhya’s Krating Daeng, a tonic discovered by Mateschitz who was awed by its powerful effect on reducing his jetlag post travel to the Far East. Mateschitz had experienced nothing as effective in the Western market and saw huge potential for a more palatable version amongst the Westerners, who needed more than one of the few existing sports energy drinks to help relieve them of the symptoms of a busy lifestyle. In 2006 it was recorded that more than three...
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...Product into a Happening Brand Abstract: The Red Bull energy drink was launched in Austria in 1987, by Dietrich Mateschitz. He claimed to have experienced the invigorating properties of a popular Thai energy drink, Krating Daeng, on a trip to Thailand. Realizing that a similar product could have good potential in Western markets, Mateschitz obtained the license to manufacture a carbonated version of Krating Daeng from its Thai owners. Obtaining permission to sell Red Bull in Europe was not easy, as it contained several ingredients whose effects on the human body were untested However, permissions were eventually obtained, and Red Bull became exceptionally successful in all the markets in which it was launched. It was generally acknowledged that Red Bull's success was the product of the company's innovative marketing efforts. This case study discusses the marketing strategy adopted by Red Bull GmbH, including the company's effective employment of buzz marketing in new markets, and its sponsorship of sporting activities, especially extreme alternative sports, to enhance its image. The case also talks about Red Bull's target markets, and its pricing and differentiation strategies. It includes a section on the various controversies surrounding Red Bull, and the effects of these on its brand image. The competitive situation in the energy drinks market and Red Bull's position vis-à-vis competitors, is also discussed. The case concludes with a commentary on Red Bull's attempts at brand...
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...MKT750 MARKETING MANAGEMENT CASE STUDY DR PEPPER SNAPPLE GROUP, INC. ENERGY BEVERAGE PREPARED BY: RAMSIS ANAK WILLIAM AGIM 2012402536 Strategic Issues and Problems Being the consultant of Dr Pepper Snapple Group, Inc. (DPSG), I am charged to assess whether or not a profitable market opportunity existed for a new energy beverage brand to be produced, marketed, and distributed by the company. The decision to explore a new energy beverage was made by senior company management of DPSG as part of a corporate business strategy to focus on opportunities in (1) High Growth and (2) High Margin beverage businesses. My tasks involve a number of important factors. I must assess the likelihood that DPSG Competitive environment will be liberal or conservative in its marketing of the new energy beverage. An important consideration is DPSG role in affecting this environment, given its strong presence in the CSD market and utilizing that strength to push the new energy beverage. Ultimately I must make a “go-no go” decision. A “go” decision requires a recommendation in the form of the new energy beverage, its target market, its price, and promotion. A “no go” decision must take into consideration Dr Pepper’s profit and growth position without the new energy beverage and measures to minimize their impact. The problem facing Dr Pepper’s is how to retain its present competitive position given an environmental threat (other energy beverage) while at the same time preserving...
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... Alcohol and Energy Drinks Abstract The aim of this study was to examine whether alcohol consumption increased when an individual consumed an energy drink. 172 participants completed a two part survey comprising of questions regarding alcohol consumption and completion of the Risk Taking Questionnaire 18. The hypothesis that alcohol consumption in a single sitting would be higher in the high propensity group in comparison the low propensity group was supported. The hypothesis that alcohol mixed with energy drink consumption in a single sitting would be higher than alcohol only consumption in a single sitting was rejected. It was concluded that an individual with a higher pre-disposition for risk-taking behaviour would consume more alcoholic beverages in a single sitting than an individual without the pre-disposition to risk-taking behaviour. Future research should examine the effects alcohol has on energy drinks in comparison to individual consumption in order to truly understand the effects it has. Energy drinks (ED)’s are a relatively new concept in the overall soft-drink market, but are essentially rebranding and reselling caffeine to a different target market with an entire new sense of appeal. This appeal seen by the younger demographic of consumers is being combatted with the potential health risks of consumption, especially combined with the depressant, alcohol (McCusker, Goldberger & Cone, 2006).These energy drinks claim to provide...
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...Coca - Cola: Case study This case is about Coca-Cola's corporate social responsibility (CSR) initiatives in India. It details the activities taken up by Coca-Cola India's management and employees to contribute to the society and community in which the company operates. Coca-Cola India being one of the largest beverage companies in India, realized that CSR had to be an integral part of its corporate agenda. According to the company, it was aware of the environmental, social, and economic impact caused by a business of its scale and therefore it had decided to implement a wide range of initiatives to improve the quality of life of its customers, the workforce, and society at large. However, the company came in for severe criticism from activists and environmental experts who charged it with depleting groundwater resources in the areas in which its bottling plants were located, thereby affecting the livelihood of poor farmers, dumping toxic and hazardous waste materials near its bottling facilities, and discharging waste water into the agricultural lands of farmers. Moreover, its allegedly unethical business practices in developing countries led to its becoming one of the most boycotted companies in the world. Not with standing the criticisms, the company continued to champion various initiatives such as rainwater harvesting, restoring groundwater resources, and going in for sustainable packaging and recycling, and serving the communities where it operated. Coca-Cola planned...
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...TEXAS A&M UNIVERSITY CORPUS CHRISTI MARKETING MANAGEMENT - MKT 5320 CASE STUDY ANALYSIS: Dr Pepper Snapple Group, Inc: Energy Beverages OLUSUBOMI Y. ADETUNJI STUDENT ID: A03936869 PROBLEM DEFINITION. Dr Pepper Snapple Group Inc., a non-alcoholic beverage producing company decided to enter into the market with a new product (energy drink) and they were faced with some problems along the line. They decided to introduce an energy beverage brand to the market (existing market) which already has competitors. With this as focus, it was important to choose best market and distribution channels and some other business strategies for the product in order for it to be a success. The problem faced includes retainment of its present competitive position in the market with other energy drink companies and at the same time preserving profitability and customer base. In order to maintain the market competition, the business strategy to launch the new products into the market was very vital. Some of the factors that has to be considered before the product launch is considered are: * Industry Experience * Customer base * Profitablity growth * Favorable market condition * Core competencies * Management Team Decision. ALTERNATIVES PROVISIONS FOR PRODUCT SUCCESS The company could carefully select the strategy to launch the new product into the market to understand both the strength of their current competitive position and the strength of the...
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...Energy Drinks: An Assessment of Their Market Size, Consumer Demographics, Ingredient Profile, Functionality, and Regulations in the United States M.A. Heckman, K. Sherry, and E. Gonzalez de Mejia ABSTRACT: The consumption of energy drinks is rapidly increasing, as demonstrated by their large market growth. The targeted demographic group is teenagers, young adults, 18 to 34 y old; although expansion into nontraditional markets is also occurring. It is claimed that energy drinks can offer an increased energy boost related to their ingredient profile of caffeine, taurine, herbal extracts, and vitamins. Research suggests that energy drink formulations, in addition to increasing energy utilization, may also improve mood, enhance physical endurance, reduce mental fatigue, and increase reaction time. However, in most cases, the corresponding mechanisms of action are not clear. In addition, concerns have been raised over their safety and with a currently weak regulatory environment, efforts need to be made to ensure consumer safety. The objective of this article is to review the current U.S. energy drink market with emphasis on its market size, target demographic, active ingredients, potential benefits, safety, and regulations. Introduction Energy drinks refer to beverages that contain, besides calories, caffeine in combination with other presumed energy-enhancing ingredients such as taurine, herbal extracts, and B vitamins. They first appeared in Europe and Asia in the 1960s in...
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...marketing for Portland Drake Beverages, is positioning the newly acquired beverage line, Crescent Pure, but must decide whether the drink should be positioned in the sport drink market or energy drink market. What's Going On? * Sarah Ryan, VP of marketing for PDB * Crescent Pure Acquisition * Need to position Crescent in the market * $750,000 for advertising * Desire to be first mover * Define: 10/1 Launch: 1/1 In the Beginning... * Peter Hooper, founder of Crescent * Organic Energy Drink * Started in Oregon * Michael Booth, CEO of PDB saw potential Why Crescent Pure? * 70% less sugar * Caffeine = 1 cup of coffee * Sold 1000 cases/month * $2.75 < $3.75 * Low calories * Energizing, hydrating, all-organic Options: The PDB Company needs to choose one of the following actions, in regards to its branding strategy: 1. To strategically position Crescent Pure as an energy drink 2. To strategically position Crescent Pure as a sports drink Sports Drink Pros of Sports Drinks 1. Consumers chose sports drinks more often. 2. The ingredients boost endurance and relieve fatigue. 3. Market is $6.3 Billion. 4. A high percentage of consumers considered sports drinks "anytime beverages." 5. A Study showed consumers favored Sports drinks over Energy Drinks for multiple factors. Cons for Sports Drink 1. The sports drink market is 2.2 billion dollars less then energy markets 2. Crescent's...
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...of what is already found in the book or slides. Question 1: Do you think this company is following the differentiation or cost leadership strategy? Why? Which growth strategy (market development, product development, diversification and market penetration) did they follow to improve their product portfolio sales? Reviewing Dr. Pepper Snapple Group Inc. case and assessing the situation to dr. Michael Porter generic strategies of achieving and maintaining competitive advantage, we may see that the company mostly was following the differentiation strategy as it is offering differentiated products from its competitors in many terms including the packing and pricing [pic] As for part two ,and regarding the Ansoff's product/market Expansion Grid [pic] Some may be puzzled and think that the company was applying a Diversification strategy as it was introducing new branded product(Venom ) into a new beverage market to the company (Energy beverage market), but that's flawed as the company did not leave its current product lines(beverages) to new...
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...Textbook case study 3.1. The Rise and Fall of Four Loko 1) Are these drinks as dangerous as the critics maintain? How much of the problem is due to the high levels of caffeine, how much is due to the labelling and marketing and how much is caused by irresponsible behaviour on the part of the young drinkers? Are companies like Joose and Four Loko being singled out for social problems that are much wider in scope, in particular, alcohol abuse by young people? These drinks have been proven to be as dangerous as claimed because they contain caffeine, which is a stimulant hence keep you awake, while being mixed with alcohol, which is a depressant that slows down the body and brain; together this ‘tricks’ the mind into thinking that you are awake and ready for more alcohol. The cases of New Jersey students being hospitalised due to “serious alcohol poisoning” proves the real potential risks of consuming this beverage. In the case study it states that the caffeine content was boosted from 54mg to 156mg and had 12 percent alcohol, and these figures may not appear to be very high but after multiple drinks in a short amount of time it adds up and most young people simply do not acknowledge or care about these numbers. Personally, I do not think that the under-aged or young people who drink are to blame because it is common for people growing up to be curious and to experiment with things like this, however, there needs to be more work done on the education and awareness of alcohol...
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