Dr. Pepper Snapple Case

Dr. Pepper Snapple Group Inc Case

Problem Identification:

There are several issues related to the Dr. Pepper Snapple Group, Inc.’s introduction of a new branded product into the energy beverage market. The main problem I will be focusing on for the company is looking into which channel will be more profitable. Dr. Pepper Snapple Group Inc. distributors and bottlers can deliver their product into all off -premise retailers where energy beverages are sold. However, I would like to look into whether the convenience stores or supermarkets would be more profitable for the first year. Also, I will be focusing in on who to target using those channels. Due to the breakdown of possible target markets, seen in appendix 2, the plausible target markets are Male and Female Adult (35-44) Caucasians. A secondary market that the company may want to pursue over time would be teens (12-17) over all, or possibly just the male teens.

Evaluative Criteria:

The evaluative criteria that has been chosen to judge these alternatives are as follow:

-Price able to charge à looking for higher margins

-Potential Profit

-Growth in channel contribution to sales

-Market Share

Alternatives:

Assumptions, such as numbers used, can be found in Appendix 1.

1) Convenience Store & Female Adults

Female Adults are 39% of the pop & 10% are Energy drink users and drink 2.12 cans a month

Adults 35-44 are 15% of the pop & 25% are Energy drink users and drink 4.16 cans a month

Manufacturing price: $3.00 x .50= $1.50; $3.00-$1.50=$.150;

$1.50 x .36= $.54;$1.50- $.54= $.96; $.96x .60= $.58; $.96-$.58=$.38

Potential Profit: $.38x 117,000adult females = $44,460 x 2.12/month= $94,255.20 x12 Months= $1,131,062.40

Convenience stores will be decreasing over the next few years as a contributor to the market sales from 74% in 2006 to 60% in 2010 as seen in Appendix 3

Based on Appendix 3, Convenience stores overall contribution to the industry’s sales will continue to...