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    DR - Pepper Case Analysis

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    Maisa Lyne
    Dr. Pepper Snapple Group is assessing whether to launch an energy beverage brand in 2008. If launched, it would support the company's strategy of focusing on high-growth beverage categories. Energy beverages are defined as drinks that provide energy and make up the 4th largest non-alcoholic beverage category in the US. Dr. Pepper Snapple has strengths in its diverse brand portfolio and strong operating margins and cash flow that could support an energy beverage launch. Major competitors in the energy drink space include Red Bull, Monster Energy, and brands from PepsiCo and Coca-Cola.

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    DR - Pepper Case Analysis

    Uploaded by

    Maisa Lyne
    128 views10 pages
    Dr. Pepper Snapple Group is assessing whether to launch an energy beverage brand in 2008. If launched, it would support the company's strategy of focusing on high-growth beverage categories. Energy beverages are defined as drinks that provide energy and make up the 4th largest non-alcoholic beverage category in the US. Dr. Pepper Snapple has strengths in its diverse brand portfolio and strong operating margins and cash flow that could support an energy beverage launch. Major competitors in the energy drink space include Red Bull, Monster Energy, and brands from PepsiCo and Coca-Cola.

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    Dr. Pepper Case Analysis

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    Dr.pepper Case Analysis

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    Dr. Pepper Snapple Group is assessing whether to launch an energy beverage brand in 2008. If launched, it would support the company's strategy of focusing on high-growth beverage categories. Energy beverages are defined as drinks that provide energy and make up the 4th largest non-alcoholic beverage category in the US. Dr. Pepper Snapple has strengths in its diverse brand portfolio and strong operating margins and cash flow that could support an energy beverage launch. Major competitors in the energy drink space include Red Bull, Monster Energy, and brands from PepsiCo and Coca-Cola.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    128 views10 pages

    DR - Pepper Case Analysis

    Uploaded by

    Maisa Lyne
    Dr. Pepper Snapple Group is assessing whether to launch an energy beverage brand in 2008. If launched, it would support the company's strategy of focusing on high-growth beverage categories. Energy beverages are defined as drinks that provide energy and make up the 4th largest non-alcoholic beverage category in the US. Dr. Pepper Snapple has strengths in its diverse brand portfolio and strong operating margins and cash flow that could support an energy beverage launch. Major competitors in the energy drink space include Red Bull, Monster Energy, and brands from PepsiCo and Coca-Cola.

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    Dr.

    Pepper Snapple Group,


    Inc.

    By: Laura Peters, Justin Miller, Maisa Ryerson


    Case Overview

    • In 2007, Andrew Barker is charged with assessing whether or not a profitable market
    opportunity exist for a new energy beverage brand to be produced, marketed, and
    distributed by the company in 2008

    • Energy beverages are broadly defined as “drinks that provide a consumer with a boost
    of energy”

    • The decision to explore a new energy beverage is part of a corporate business strategy,
    which aims at focusing on opportunities in high-growth beverage businesses. As part of
    this strategy, Dr Pepper Snapple Group, Inc. has previously launched the Accelerade
    RTD brand, a ready to-drink sport drink.
    Business Strategy
    6 Key elements

    • Build an enhance leading brands


    • Focus on opportunities in high-growth and high-margin categories
    • Increase presence in high-margin channels and packages
    • Leverage the company’s integrated business model
    • Strengthen the company’s route-to-market through acquisitions
    • Improve operating efficiency
    Strengths
    • Owns a diverse well known portfolio of CSD and non-CSD brands.
    • This provides bottlers, distributors, and retailers with a wide variety of products
    and provides foundation for growth and profitability.
    • #1 flavored CSD company in U.S.
    • Strong Customer relations, with many top customers from bottlers, distributors,
    and national retailers.
    Strong Operating Margins and Stable
    Cash Flow
    • The strength of the Dr. Pepper Snapple Group, Inc. product portfolio
    have enabled the company to generate strong operating margins
    which, combined with relatively modest capital expenditures have
    delivered significant and stable cash flow.
    Energy Beverage Market
    • Excluding coffee, energy beverages are the fourth largest nonalcoholic
    beverage category in the U.S.
    • This comes after carbonated soft drinks, sports drinks, and bottled
    water.
    • The Energy Beverage market produced a estimated retail dollar sales
    of $6.2 billion in 2006.
    • 71% of total retail sales came from off-premises sales through
    convince stores, supermarkets, and mass merchandisers in 2006.
    Energy Beverage Consumer
    • The heavy users of energy beverages usually consist of males between
    ages of 12 and 34.
    • Energy drinks are often consumed in the middle of the day usually at
    home, work, car, and school.
    • Energy drink consumers drink energy beverages include energy boost,
    mental alertness, refreshment, and taste.
    Major Competitors
    • Red Bull North America
    • Hansen Natural Corporation: Monster Energy Drinks
    • Pepsi-Cola: AMP Energy and SoBe Adrenaline Rush
    • Rockstar Inc.
    • Coca-Cola: Full Throttle and sugar-free Tab Energy Drinks.
    Product Line and Brand Positioning
    • Existing Energy Drink brands have sugar-free options. Regular energy
    drinks have an 80% share of the market. Where as sugar-free have
    20%.

    • Brand Slogan Examples:


    • “Red Bull gives you wings.”- Red Bull
    • “Unleash the Beast” - Monster
    Advertising and Promotions
    • Brand media advertising in the energy drink market is modest. Except
    for Red Bull. Energy beverage brands mainly rely on promotional
    vehicles like brand Web sites, events, and sponsorships to help
    promote the brand.

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