Report On Snapple: Revitalizing a Brand

Prepared for: Mahbub Hossain

Group Members:

Mahbub Md. Rakib 08-10322-1

Farzana Tuli 08-10322-1

Farzana Tuli 08-10322-1

Farzana Tuli 08-10322-1

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TABLE OF CONTENTS

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ACKNOWLEDMENT 3

EXECUTIVE SUMMARY 4

INTRODUCTION 5

Question-

1

How would you characterize Snapple’s brand image

and sources of brand equity? What are the strengths

and weaknesses of the brand’s existing personality

and image?

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Question-

2

Where did Quaker go wrong? What could it have done

differently? Is Cadbury in danger of making the same

mistakes as Quaker did?

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Question-

3

How effective and appropriate do you think Triarc’s marketing program was? How effective and appropriate do you think Cadbury’s marketing program is? What changes if any, would you recommend Cadbury make to the Snapple marketing?

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Question-4

How has Snapple’s sale to Cadbury affected Snapple’s equity? Are there dangers of the brand’s association with a large corporation?

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Question-

5

What do you think Cadbury’s next move with Snapple should be? Should the company attempt to expand or reposition Snapple?

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Acknowledgement

This study is the outcome of a research work undertaken by the Brand and Product

Management course instructed by Mr. Mahbub Hossain faculty of business

administration of American International University Bangladesh for Spring 2011

semester’s student to experience and gather knowledge from a practical marketing

research.

We are grateful to them who have spontaneously assisted us in conducting the study.

All of our group members supported each other throughout the making of this report

and completing it successfully. We have done some group discussions, where we

shared each other’s views on the different issues of our topic.

The success of this report depends on the contribution of the number o people.

Specially those who have shared their thoughtful guidance and suggestions to

complete this report. Without their help, support and co-operation we would not be

able to complete our study successfully.

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EXECUTIVE SUMMARY

In this assignment we practiced on Snapple Corporation include production Snapple’s brand image and sources of brand equity, Quaker’s management, Triarc’s marketing program and Cadbury’s attempt on Snapple.

Most important thing for a company is to set a brand image that makes it superior

than other products in the market. Brand image is the identification of company.

Today branding in such a strong force that anything does not go unbranded.

The second important thing is the management. Here we can see Snapple went

through several management programs. Some were successful an others led the

company down. Soproper management can lead the success to this company.

Target the customer is the most important factor to run the company successfully.

For foods and beverages the target market of Snapple is from middle to upper class

people.

Price is important to the producer for the revenue. So setting price very carefully is

the duty of the company. If the product prices become high the demand of the

product will be low. So, Snapple should set their price at minimum possible but

definitely should not go below the target segment requirement, which will cover the

cost of making marketing of the product and also the target profit.

Sales promotion is another factor, which make the product popular and create

awareness about the product among the people and motivate the people to buy the

product. But it takes a huge investment so the sale promotion activities should be

planned properly. Distribution is the last important factor for the availability of the

product.

To complete this report we gathered information through different sources from

internet, documents of Snapple about the company and others.

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Introduction:

The roots of Snapple Corporation date back to 1972 in Brooklyn. In 1980s Snapple introduced ready-to-drink fruit juices and iced teas. Snapple was the first company to sell its drinks in single serving wide-mouthed glass bottles rather than aluminum cans.

By 1990s Snapple emerged as a nationally recognized brand.. With the combination of a unique product and package design and colorful advertising the company achieved nationally recognized brand. Later Snapple went through several management system and owners.

Quarker Oats purchased Snapple for $1.7 billion but for poor management system he was unable to capitalize the brand’s previous success. After Quarker sold it to Triarc Beverage Group the brand faced a new challenge to reconnect with consumers.

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1. How would you characterize Snapple’s brand image and sources of brand equity? What are the strengths and weaknesses of the brand’s existing personality and image?

Answer:

The roots of Snapple Corporation date back to 1972 in Brooklyn. In 1980s Snapple introduced ready-to-drink fruit juices and iced teas. Snapple was the first company to sell its drinks in single serving wide-mouthed glass bottles rather than aluminum cans. By 1991 Snapple emerged as a nationally recognized brand.

Snapple’s Brand Image:

The image that Snapple has is somewhat like the luxury good for the average person- a Porsche for the poor. It defines itself as new age and quirky. It has some similarities with Red Bull in that it created a product category and did it their own way but it is less edgy and geared more to mainstream America. It has a quirky and a bit of a rebellious everyman vibe. It equity comes from being a different non carbonated drink, natural ingredients and the slogan ‘the best stuff on earth’. They also have equity from differentiation and the introduction of new taste experiences to the consumer. Originally, they had equity in being so ‘every man’ and approachable.

Snapple’s Brand Equity:

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• In consumer survey they suggested Snapple name was catchy, popular and endangered positive feelings in consumers.

• Promotion:

-During 1990s Snapple ran a series of successful ad campaigns in movies, popular shows like Seinfeld and accommodated with celebraties.

-Through national radio, TV, consumer composed Jingle and word of mouth publicity.

-Company's most successful ad “Wendy-The Snapple Lady”.

Strength of Snapple:

Brand image : Snapple has a very renown

Product line

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• Leonard Marsh, Hyman Goldman and Arnold Greenburg sold fruit juices under “Unadultered Food Corporation”

• Carbonated apple soda was part of their beverage line; snappy apple taste

• Snapple tea was introduced; Snapple Lemon Tea was first

The flavored drinks available

Today they have 50 varieties of flavored tea, fruit juices and flavored water; ”Made from The Best Stuff on Earth”

Weakness:

• Struggling with premium price which is not accepted by all.

• Unlike cola or fruit juice, home-prepared iced tea can be prepared in less time and much less cost than the store bought, ready to drink equivalent.

• Error in Quaker Oats Management:

• Neither followed a regular schedule for Snapple advertising, nor introduced new products quickly.

• Most Snapple drinks are mostly sweetened water, containing less than 10 percent fruit juice.

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2. Where did Quaker go wrong? What could it have done differently? Is Cadbury in danger of making the same mistakes as Quaker did?

Quaker went wrong at step one. They should never have acquired Snapple as it did not fit the company ethos in any way. Quaker Oaks is solid, middle America, wellness oriented and the ads are high quality and high minded. Snapple is outsider, quirky, irreverent, and the ads appear low budget, mid to lower class settings (wood paneling in every home) and the ads are designed to appear amateurish. It is as though their very being is small time and small town (I was surprised to learn they originated in NY city!) so perhaps that makes them more marginal than small town.

They simply managed it very poorly. The reasons for Quaker’s failed acquisition of Snapple can be attributed to cultural differences between both brands and differences in operating styles between both companies. Snapple and Gatorade appealed to different audiences in different markets. Quaker failed to acknowledge or accept the cultural differences between the brands, and as such, Snapple lost market share and brand image. For example, subsequent to the acquisition, Quaker destroyed Snapple’s offbeat brand image by terminating relationship with Wendy Kauffman. People began to question Snapple’s new corporate image. Also, Quaker alienated Snapple’s network of established distributors by attempting to force a partnership. Quaker destroyed healthy relationships that took Snapple years to develop. Furthermore, Quaker failed to recognize that offering Snapple in larger package and bottles sizes would be unsuccessful given that Snapple sold best in 16-ounce containers. The mass-market operating style for Gatorade was not conducive to Snapple’s traditional business.

Acquisition fever is not always good for the acquired company or the one acquiring or even for the economy in general. Quaker and Snapple went

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together about as well as Hippies and Quakers would. They do not speak the same language or see the world in the same way. The spectacular loss of financial value under the Quaker management must surely tell the tale. It could not have made a success of Snapple unless it somehow distanced the parent company from the Snapple subsidiary and conducted business in an entirely different manner.

Cadbury, with its less defined corporate image is not in as great a danger for loss of financial value but it too is a dubious fit. After watching its ads, though, it is much less straight laced and it at least has the advantage of being a candy company which is much more in line with the true nutritional value of Snapple. I think that they should attempt to expand as soon as the market place allows them an opening.

3. How effective and appropriate do you think Triarc’s marketing program was? How effective and appropriate do you think Cadbury’s marketing program is? What changes if any, would you recommend Cadbury make to the Snapple marketing?

I believe that the sale price indicates that Triarc was very successful but I am not sure that it can be sustained long term. Its packaging was greatly improved, its focus on what Snapple really was improved dramatically and it helped to restore the sense of fun and premium.

1) Triarc’s took a program to reconnect the brands with consumers, for this reason the company sold 1oo million more bottle of Snapple.

2) Triarc’s inc. increased annual sales for the first time since 1995.

3) Sales of Snapple rose 8 percent in 1998 and contributed significantly to Triarc’s 50% increase in premium beverage sales that year.

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4) Using off-the-wall marketing techniques such as nationwide contents and unusual bottle labeling. Many of Triarc’s marketing efforts aimed to recapture the “feel” Snapple had before it was purchased.

5) Companies back-to-the-roots advertising campaign sponsorship program was very strong and it was a key points of Snapple marketing program.

Trairc needd to revitalize the brand by introducing a marketing plan focuses on the unique characteristics that made it successful initially. Trairc needs to reintroduce Snapple with advertising campaigns in radio, television, print, etc. promoting the healthy, natural, and quirky characteristics of the brand. In line with this, Snapple needs to get a new spokesperson (Wendy!) that can relate to the consumers and embody the “entrepreneurial story” that attracts many individuals to its beverages.

Triarc lead Snapple into a dicey advertising direction toward the end though. To make a parallel, once daytime soaps venture onto the path of marginalized sex and the occult, the soap has not got long to live. It appears to be a desperate attempt to gain ratings. In Snapple’s case, they tried to regain their edge by the ‘Fruit ads’. They are actually fairly well done and of much higher production quality than previous Snapple ads but they seem to be aimed at a different demographic. I will be direct in my opinion: I believe that they tried to regain their edgy feeling by adopting an old name for homosexuals and positioning themselves as accepting and open minded. The little fruits also bring to mind the underwear commercials and the controversies surrounding them. They won a best ad but I think those awards are often given for social change and brave stances.

Cadbury has taken the little fruits ads into more blatant sexuality and more edgy events. I think that they missed the fun and tipped over onto edgy which I do not think can be sustained long term with this product. This is not Red Bull nor should it be. I think there is something fundamentally inauthentic in this approach for this product.

If I were in charge, I would back away from the sexual edginess and I think I would find the kind of stunts like some of the JackAss (movie) ones, that are extreme but harmless and funny or a comedian that was not too high brow but who thought with new perspectives on things that affect this demographic..

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In addition, I think that Cadbury should spin off Snapple into an independent unit as soon as possible.

4. How has Snapple’s sale to Cadbury affected Snapple’s equity? Are there dangers of the brand’s association with a large corporation?

Answer:

The sale proved that Snapple was back and that it had brand equity again. The bargain basement price to Triarc was an awakening. Triarc did an amazing short term job of bringing it back to sell again but that is what they specialize in and they needed the value to peak to realize that kind of profit. It is now incumbent upon Cadbury to keep it going. But it is quite hard for the long run.

Cadbury’s Strategies:

• Launched Exotic flavors and announced in creative ways

• Nationwide Campaign

• Meal Replacement

• Official Beverage of New York

This brand should never be associated with a large corporation. It is not the way this type of business needs to run and it almost kills the equity by placing it in other sugarcoated “nice” products like Dairy Milk chocolate bars. This is a serious danger to the product line and brand equity. It is somehow hypocritical and consumers sense that the edgy stance is marketing hype only.

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5. What do you think Cadbury’s next move with Snapple should be? Should the company attempt to expand or reposition Snapple?

Sell is the only way to survive the company if they see there is not enough sell in the market Cadbury should make the Snapple business unit independent and run it brand like Red Bull is run with its own personality. Repositioning the Americas Beverage group would be the most sensible course of action for the unit. Without the freedom to distance itself from big business, I do not see this unit surviving or thriving long term.

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