Dr Pepper/Snapple Case Study

Dana Waelder

Professor Ethan Allen

Graduate Marketing Cluster

November 8, 2012

Dr. Pepper Snapple Group Case Study

In September 2007, the Snapple Brand Manager, Andrew Barker, was tasked with determining whether or not it would be profitable for the Dr. Pepper Snapple Group to market a new energy beverage brand in 2008. Exploring a new energy beverage is part of a corporate business strategy that focuses an opportunity in the high-growth beverage businesses. Previously, Dr. Pepper Snapple Group, Inc launched the Accelerade RTD brand, a ready-to-drink sport drink as an earlier part of this corporate business strategy (Kerin, 80). Energy drinks belong to the functional beverage group which also includes ready to drink tea, enhanced fruit drinks, soy beverages, and enhanced water. Andrew Barker believes this decision of whether or not to enter the energy drink market is very similar to deciding to launch the Accelarade RTD sports drink (Kerin, 80).

The Dr. Pepper Snapple Group makes, bottles, and distributes nonalcoholic beverages in the United States, Canada, Mexico, and the Caribbean. The Dr. Pepper Snapple Group primarily sells carbonated soft drinks, but also sells non-carbonated drinks such as tea, juice, and mixers. In 2007, the company had net sales of $5.748 billion with 89% of sales in the United States, 7% in Mexico and the Caribbean, and 4% in Canada (Kerin, 80). The company feels they have 7 key strengths which include strong portfolio of leading consumer-preferred brands, integrated business model, strong customer relationships, attractive positioning within a large, growing, and profitable market, broad geographic manufacturing and distribution coverage, strong operating margins and significant, stable cash flows, and experienced executive management team (Kerin, 82-83). Also, they have 6 key business strategies that capitalize on their strengths which include build and enhance leading brands, focus on opportunities in high-growth and...