Dr. Pepper Snapple Group Inc. Energy Beverage

TEXAS A&M UNIVERSITY CORPUS CHRISTI

MARKETING

5320

Case No. 1

Dr. Pepper Snapple Group, Inc. Energy Beverage

Introduction:

Dr. Pepper Snapple Group Inc. is already been an established Integrated brand owner, bottler, and distributor of nonalcoholic beverages in the US, Mexico, and Canada by 2007. The company’s net sales figures are attributed to the US with 89%, Canada with 4%, and a combined 7% in Mexico and Caribbean.

In the US and Canada, the company mainly focuses on the flavored Carbonated Soft Drinks (CSD) market, with its own labels (like Dr. Pepper, 7Up, Canada Dry etc.) as well as local or regional smaller brands. Dr. Pepper Snapple Group, Inc. commanded 18.8% market share in the CSD market of the US in 2007.

As for the non-CSD market segment in the US, the company serves ready-to-drink teas, juice drinks, and mixer categories. In Mexico and the Caribbean, Dr. Pepper Snapple participates primarily in the carbonated mineral water, flavored CSD, bottled water, and vegetable juice categories. The company bottles and distributes most of its products through its own bottling and distribution network, barring the Caribbean.

Problem:

In September 2007, aiming at the high-growth beverage business, the higher management of Dr. Pepper Snapple Group Inc. tasked Mr. Andrew Barker with evaluating the profitability and scope for a new energy drink in the energy beverage market- a completely new one for the company.

If see fit, for him the next challenge was to come up with the pricing, packaging and channeling strategies as well as selecting target people and flavors, to compete with the already well-established brands like Red Bull, Hansen Natural, Pepsi-Cola, Coca-Cola and others.

According to Mr. Barker, the challenge for recommending a new energy drink is quite similar to the decision to introduce Accelarade RTD - a ready-to-drink sports beverage launched as part of this business expansion strategy.

Strengths

* Diverse range of CSD...