Snapple Marketing Case

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  • 1994- Quaker acquires Snapple for $1.7 billion 1997- Triarc acquires Snapple for $300 million We should grow to 1 billion over the next five years by matching the rate of Snapple’s earlier success and other comparable beverages such as Gatorade
  • 1994- Quaker acquires Snapple for $1.7 billion 1997- Triarc acquires Snapple for $300 million We should grow to 1 billion over the next five years by matching the rate of Snapple’s earlier success and other comparable beverages such as Gatorade
  • Legend has it that Queen Victoria offered a reward of one hundred pounds to anyone who could bring her a fresh mangosteen.
  • In order for Triarc to increase revenue, not only should it get the lost customers back, but it should also bring in new customers through creating new channels of sales. We discovered that Snapple can get into the above three areas while enhancing the fun, quirky, healthy brand image even further.
  • Put in vending machine for snapple plus products (health enhanced product lines) Post nutrition facts on the vending machines comparing soda and snapple
  • Flagship stores in metropolitan areas such as SF union square, NY times square, Vegas Strip 2 main functions 1. target working business people during lunch (provide internet access, deli) 2. target tourists/become the symbol of snapple’s quirkiness. - analogous to apple store - Display of all flavors - Designate an area for the newest flavors (the exotic fruit flavors) - sample tasting -
  • Profits (770 students/school)x (1 purchase/week)x 180 days in a school year=19, 800 bottles/year/school x 1,800 schools= 356,400,000 bottles =14,850,000 cases  $140,850,000 in revenue growth $29,700,000 in profit per year (can make back the investment money in 2 yrs) Assuming 1 purchase/10 days  10,395,000 cases  $103,950,000 in revenue growth $20,790,000 in profit (can make back in 3 yrs)
  • Snapple Marketing Case

    1. 2. Case History In 1994, Quaker acquired Snapple at the height of its popularity for $1.7 billion. Quaker made a series of changes, disaffecting Snapple’s most loyal customers and tarnishing the brand’s image, resulting in declining revenue. In 1997, Triarc acquired Snapple for $300 billion, and needed a strategy to turn the brand around.
    2. 3. Challenges
    3. 4. Objective Increase revenue to $1 billion within the next 5 years + 116%
    4. 5. Competitor Analysis: Brand Image Healthy Unhealthy Mainstream Unique Supermarket Brand Shares 1997 Market Share is indicated by relative circle size.
    5. 6. Objective Brand Image Healthy Unhealthy Mainstream Unique Supermarket Brand Shares 1997 Healthier and more unique Grow market share
    6. 7. Customer Analysis
    7. 8. Customer Value Proposition “ For the quirky consumer who needs a break from a busy day, Snapple is a flavorful, healthy choice.” To achieve the objective brand image, Snapple needs a value proposition that will resonate with its target market.
    8. 9. Recommendations Overview
    9. 10. Product Line Renovation Unique Flavors Cap Fact: Queen Victoria offered a reward of 100 pounds to anyone who could bring her a fresh Mangosteen Offering a line of unique flavors maintains Snapple’s quirky image while differentiating them from competitors MANGOSTEEN
    10. 11. Product Line Renovation IMMUNE HEALTH Immune Health: Fortified with vitamins to help strengthen your Immune System Snapple Plus The Snapple Plus Line moves Snapple toward a healthier brand image Protein Plus: Packed with protein to help build muscle
    11. 12. Product Line Renovation Boost Snapple Boost All natural energy boosting ingredients The Snapple Boost Line competes with the energy drink market by providing a healthier alternative for target customers with fast-paced lifestyles
    12. 13. Promotion ?
    13. 14. Placement Not only should Snapple appeal to lost customers, but it should also bring in new customers by creating new sales channels
    14. 15. Placement School Vending Machines Snapple will appeal to school boards and parents as a healthy alternative in a beverage market saturated with soda products
    15. 16. Placement The Snapple Store Flagship stores in metropolitan areas will be an integration of marketing efforts
    16. 17. Timeline
    17. 18. Financial Summary <ul><li>Product Line Renovation </li></ul><ul><ul><li>$140,000 one time + $140,000 annually </li></ul></ul><ul><li>Snapple Store </li></ul><ul><ul><li>$650,000 annually </li></ul></ul><ul><li>Label Design Contest </li></ul><ul><ul><li>$19, 600 </li></ul></ul><ul><li>TV Advertising </li></ul><ul><ul><li>$1.6 million annually </li></ul></ul><ul><li>Vending machine contracts </li></ul><ul><ul><li>$12 million annually </li></ul></ul><ul><li>TOTAL $14.5 million for all recommendations </li></ul>
    18. 19. Cost Analysis: New Flavors <ul><ul><li>Exotic Fruits </li></ul></ul><ul><ul><ul><li>4/year x $35,000 each = $140,000 annually </li></ul></ul></ul><ul><li>Snapple Boost </li></ul><ul><ul><li>One energy formula $35,000 </li></ul></ul><ul><ul><li>Snapple Plus </li></ul></ul><ul><ul><ul><li>3 formulas x $35,000 each= $105,000 </li></ul></ul></ul><ul><li>TOTAL $280,000 </li></ul>
    19. 20. Cost Analysis: TV Advertising <ul><li>$100,000 (Production Cost) + </li></ul><ul><li>$300,000 (air a 30-second ad) x 5 slots / season </li></ul><ul><li>TOTAL $1.6 million annually </li></ul>
    20. 21. Cost Analysis: Vending Machine <ul><li>Vending Machine </li></ul><ul><ul><li>($1,500/machine) x (2 machines/school) x (3,600 schools/year) = $10.8 million/yr for 3 yrs </li></ul></ul><ul><li>Personal Selling </li></ul><ul><ul><li>Salary ($60,000/ year) x employees (20) = $1.2 million </li></ul></ul><ul><li>Restocking </li></ul><ul><ul><li>Existing Distributors </li></ul></ul><ul><li>TOTAL = $12 million </li></ul>
    21. 22. Cost Analysis: Snapple Store <ul><li>Store Operation </li></ul><ul><ul><li>$500,000 / yr </li></ul></ul><ul><li>Rental Cost </li></ul><ul><ul><li>$150,000 / yr </li></ul></ul><ul><li>TOTAL= $650,000 annually per store </li></ul>
    22. 23. Cost Analysis: Label Design Contest <ul><li>$10,000 prize </li></ul><ul><li>Info Sessions/ Advertising </li></ul><ul><ul><li>2 representatives(travel and board), 1 intern $3,300 </li></ul></ul><ul><ul><li>Posters/handouts $4,400 </li></ul></ul><ul><ul><li>Labor $8 x 8hrs x 3days x 10schools = $1,920 </li></ul></ul><ul><li>Top 10 Art Schools </li></ul><ul><li>TOTAL $19,600 </li></ul>

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