Snapple ppt (1) (1)


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Snapple ppt (1) (1)

  1. 1. • 1972 - Snapple was founded by Leonard Marsh, Hyman Golden, and Arnold Greenberg in New York. • 1990 – Snapple emerged as a nationally recognized brand in the beverage industry. • 1994 – Quaker purchased Snapple for $1.7 billion. • 1997 – Quaker sells Snapple to Triarc group at $300 million, a loss of $1.4 billion over 4 years. • 2000 – Triarc group sells Snapple to Cadbury Schweppes for $1.45 billion, a profit of $1.25 billion over 3 years.
  2. 2. Arnie Greenberg, Leonard Marsh and Hyman Golden went into business selling all-natural apple juice to health food stores in Greenwich village, in 1972. Business grew using internally generated funds. It built a strong network of distributors across New York City. Expansion of distribution lead to a turnover of $4 million in 1984 and $8 million in 1986. Snapple managed to rope in tennis star Ivan Lendl for several ads, even though it was an idea which eventually faded away.
  3. 3. Had something essentially sensual about it. It is full of variety, imagination , flavor and more new combinations The packaging of Snapple plays out the taste experience. Is neither a cola drink nor a usual drink like water. Has in-betweenity, i.e it is not a drink for the ones who are really serious about their health, nor the ones who aren't. Was a fashion- sensitive and quirky brand, compared to other drinks in the market. An authentic drink, i.e it was a pure drink. It was fruity, and hence healthy. Was a fun drink. It was informal, natural, p ersonal and playful.
  4. 4. By the late 1980s the brand had a strong presence and enduring appeal in the United States In 1984 the annual turnover was $4 million and doubled by 1986 By 1985 up to 1 million cases distributed annually in Boston only Was a lucrative product of the 80’s appealing to a lot of people. Brand was strongly connected with consumers as it had done things differently Less competition in this category helped Snapple to grow at a faster pace
  5. 5. The success story of the brand was so exemplary that it created a buzz and was discussed in many media…. Carl Gilman an experienced professional from Beverage Industry was hired to run sales and marketing Under his supervision, advertising budget was increased to $1 million & the distribution system was intensified The advertising agency Kirshenbaum, Bond & Partners adopted the “100% Natural” as their main advertising mantra and even aired the events that really happened. Wendy Kaufman was appointed as the spokesmodel and was a sucess Established as a FASHION BRAND
  6. 6. In 1987, Snapple hired professional management from Carl Gilman to run sales & marketing. In 1994, the management of Quaker Oats took over the reins. From 1994 to 1997, there were several changes in management made by Quaker. In 1997, Triarc Companies bought the brand and management was handed over to Mike Weinstein.
  7. 7. In 1992, control of the company was sold to the Thomas H. Lee Company in a leveraged buyout and subsequent public offering In 1994, T. H. Lee sold it to Quaker Oats for $1.7 billion in cash with sales running at $674 million By 1997, sales were down to $440 million when Triarc Companies bought the brand
  8. 8. Strategy of Carl Gilman • Seeking suggestions from focus groups on improvement of label design. • Spending more on advertising and effective exploitation of media for brand promotion. • Intensifying independent distribution throughout East Coast which included hiring Ted Landers for distribution in Boston. Result • Snapple witnessed its highest sales from 1987 to 1994 because of these marketing strategies.
  9. 9. Strategy of Quaker Following the huge success with Gatorade, they tried to repeat similar marketing strategies with Snapple. Tried to market Gatorade and Snapple complementarily, with simultaneous movement of Gatorade in the cold channel & Snapple in the warm channel. Cut down costs on advertising and severed media relations. Introduced Snapple in larger container sizes. Tried to convince distributors to give up Snapple’s supermarket accounts to Quaker in exchange for right to distribute Gatorade to the rest of their accounts. Result Decline in sales. Distributors did not agree to cede rights to Snapple’s supermarket accounts. Snapple failed to make bigger presence in the supermarkets and remained confined to cold channels. Termination of contracts with Howard Stern & Wendy Kaufman led to growing unpopularity amongst general consumers and even provoked negative publicity from Stern. Attempt to complement marketing schemes between Gatorade and Snapple hand-in-hand resulted in unwarranted competition between these two brands, wherein Gatorade emerged to be the preferred beverage.
  10. 10. Snapple sales declined from $674 million in 1994, to approx $600 million in 1995 to $500 million in 1996 to $440 million in 1997. Despite the decline it maintained number 1 position in 1995 because of its premium pricing policy. Sales dropped by 20% per quarter.
  11. 11. 1980’s – Napa Naturals, Natural Quencher, SoHo, After the Fall, Ginseng Rush, Elliot’s Amazing, Old Tyme Soft Drink, Manly Sodas, Syfo, Original New York Seltzer 1990’s – Entry of Clearly Canadian and Mistic Pepsi along with Unilever(1992)- Introduced Lipton iced tea, advertising campaign with Vendla drinking Lipton . Tetley English beverage giant Pearle . Coca-Cola (1994) Introduced Fruitopia but could not do up to the target. Arizona captured nearly 17% market share priced similarly like Snapple.
  12. 12. • The takeover by Quaker was a managerial disaster due to misalignment between Snapple and Quaker’s corporate culture. This caused losses to the tune of $1.4 billion in a span of 4 years. • It also suffered due to slow growth of Quaker themselves. • Snapple also had to deal with stiff competition from new entrants into the market such as Arizona Iced Teas, Nantucket Nectars and Mystic, hence reducing Snapple’s market share. • Suffered due to some poor decisions, which included the firing of popular Snapple spokesmodel Wendy Kaufmann. They also snapped ties with radio personalities Howard Stern and Rush Limbaugh. • Quaker tried to incorporate the successful methods of Gatorade to Snapple, which backfired, by changing its distribution, packaging and other important relationships.
  13. 13. • Tap the youth Market • Brand Image • Popularity of natural no – preservative fruit juice • Grow their brand as a fashion beverage • Competition • Failed to sustain it’s Brand Value • Acquisitions shifted Snapple’s positioning in the consumer market • Volatile consumer preferences • Multiple Management Changes • Discontinuance of Media & Advertisement • Distribution • Regional Differences • Weak in warm channels including supermarket sales • Strong Brand Image/Heritage • Product Line • Full of variety and flavor • Packaging • Innovative Advertising STRENGTH WEAKNESS OPPORTUNITIESTHREATS
  14. 14. The Snapple founders (1972-1992) • Hired Carl Gilman to run sales and marketing in order to increase its distribution Advertising agency, Kirshenbaum, Bond & Partners •Hired Wendy Kaufman •Sponsored popular radio programs •Made “100% Natural” their motto •Held a Snapple Convention attended by customers Quaker (1994-1997) • Purchased Snapple with the view to combine it with Gatorade • Tried to eliminate cost of middlemen by shipping direct from factory to supermarkets • Saw risks in being associated with controversial people and terminated all such relationships • Introduced larger pack sizes and assortments but were limited by distributor trucks and retail display space • Sale of Snapple from Quaker to Triarc
  15. 15. Triarc • The key to Triarc's success in reviving the brand was in remaining true to the brand's culture. They rehired Wendy Kaufmann as the spokesmodel of Snapple. • They took a different approach, recognizing that Snapple meant different things to different people. (Eg - fashionable, regular, quirky) - none of which Quaker cultivated. • They returned to the old style and tone of advertisements, as well as reverting to the old style of packaging. • They went back to the old Snapple distribution systems, which would be mutually beneficial to Snapple as well as its partners.
  16. 16. Providing Wide Product Line will not always be a successful bet Choose brand ambassador wisely to portray strong brand image Innovative marketing strategy is beneficial for promoting brand image Targeting market on the basis of Geographical factor There should be a good advertising line Proper utilization of distribution channels in order to reach maximum availability points