Crush

1. When Cadbury acquired Crush in 1989 they discovered that Crush was available in markets that represented only 62% of orange category sales due to Proctor & Gamble’s decision to distribute its product through warehouses rather than bottlers. This decision caused many bottlers to look elsewhere for business and lead to a decrease in the number of bottlers that distributed the brand. Looking at Tables 1 and 2 which look at market shares and market coverage of orange carbonated drinks from 1985 to 1989 it is apparent that there is a positive correlation between the two. Brands such as Mandarin Orange Slice which has 88% coverage has a 21% market share. Figure 1 shows the corresponding correlations between market share and market coverage for the other brands. Because the number of bottling distributors directly influences market coverage, an increase in the number of bottlers is needed for Crush to increase its market share in this industry. While an important first step has been accomplished by initiating and renewing long-term

2. contracts with the bottlers allowing for increased distribution, the bottlers are “gauging the kind and amount of advertising and promotional support that Cadbury would provide.” Therefore Cadbury should aggressively participate in promotions that will establish their recognition of the important role the bottlers will play in Crush’s re-launch. There is also a correlation between advertising expenditure and market share. See Table 3 and Figure 1. Mandarin Orange Slice, which has a market share of 21%, spends $11.3 million on advertising, while Crush, which has a market share of only 8% spends $1.8 million on advertising. Typically soft drink marketing is jointly implemented by concentrate producers and bottlers and focuses on media advertising, such as television commercials and magazine ads in conjunction with merchandising and consumer promotions. Merchandising promotions for retailers are an important factor in increasing...