1 Cadbury Beverages, Inc. Crush Brand By: Steven Gutowitz Grant Marlowe Josh Winkler.

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Cadbury Beverages, Cadbury Beverages, Inc.Inc.

Crush Brand Crush Brand By:By:

Steven GutowitzSteven Gutowitz

Grant MarloweGrant Marlowe

Josh WinklerJosh Winkler

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SummarySummary

Cadbury Schweppes PLC is the world’s third largest soft drink marketer. Total annual sales in 1989 were $4.6 billion. Primary Competitors include PepsiCo. and Coca-Cola.PLC acquired the Crush carbonated beverage brand in 1989 for $220 million.3 distribution channels involved in carbonated soft drink sales.(Concentrate Producers, Bottlers, Retail Outlets.)Orange Flavor soda accounts for 3.9% of soft drink sales.Cadbury Schweppes faces the challenge of ‘re-vitalizing’ the Crush Soft Drink Brand.

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FlavorsFlavors

• • Crush Frozen Orange DreamCrush Frozen Orange Dream

• • Crush Tropical Punch[5]Crush Tropical Punch[5]

Crush Fruity Red[6]Crush Fruity Red[6]

• • Crush Crush Ginger BeerGinger Beer

• • Crush Crush GrapefruitGrapefruit

• • Crush Crush GrapeGrape

• • Crush Crush Lemon[7]Lemon[7]

• • Crush Crush Lemon-Lime[5]Lemon-Lime[5]

• • Crush Crush Lime[5]Lime[5]

••Crush NectarCrush Nectar

• Crush Crush Orange[5]• • CruCrush Peach[5]Peach[5]• Crush Peach Sour[6]• • Crush Crush PearPear• • Crush Crush PinPineapple[5]• • CrushCrush Pink Grapefruit[6]• • Crush Red CreamCrush Red Cream• • Crush Red Licorice[6]Crush Red Licorice[6]• • Crush Crush Root BeerRoot Beer• • Crush SarsiCrush Sarsi• • Crush Crush Soda Water (Kuwait,

1970s–1990s)• Crush Sour Apple (briefly Crush Sour Apple (briefly

offered in 2005)offered in 2005)• • Crush Strawberries Crush Strawberries 'n' Cream'n' Cream• • Crush Crush Strawberry[5]Strawberry[5]• • Crush Crush Strawberry Lemonade• • CrushCrush Wild Cherry Cola[7]• • Crush WatermelonCrush Watermelon• • Diet Crush Cream SodaDiet Crush Cream Soda• • Diet Crush Grape\Diet Crush Grape\

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Primary ProblemPrimary Problem

Cadbury Beverages, Inc. has taken on the Cadbury Beverages, Inc. has taken on the challenge of trying to rejuvenate the challenge of trying to rejuvenate the bottling network for Crush soft drink brand. bottling network for Crush soft drink brand.

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Secondary ProblemsSecondary Problems

Figure out the brand equity of CrushFigure out the brand equity of Crush

Developing a new advertising and promotion programDeveloping a new advertising and promotion program

Build relationships with bottlersBuild relationships with bottlers

Increase advertising and promotional expendituresIncrease advertising and promotional expenditures

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Industry BackgroundIndustry Background

There are 3 main actors in the production and distribution of the soft drink There are 3 main actors in the production and distribution of the soft drink market:market:

1.1.Concentrate Producers: Concentrate Producers:

• 40 concentrated producers in the United States40 concentrated producers in the United States

• 82% of the industry sales are dominated by Coca-Cola, PepsiCo and 82% of the industry sales are dominated by Coca-Cola, PepsiCo and Dr. Pepper/Seven UpDr. Pepper/Seven Up

2.2.Retail Channels:Retail Channels:

• Supermarkets: Supermarkets: Account for 40% of carbonated soft drink industry salesAccount for 40% of carbonated soft drink industry sales

• Other retail channels: Other retail channels: Convenience stores, vending machines, fountain Convenience stores, vending machines, fountain service, and thousands of small retail outlets. service, and thousands of small retail outlets.

Bottlers:Bottlers:

1.1. Approximately 1,000 bottling plants in the United States covert flavor Approximately 1,000 bottling plants in the United States covert flavor concentrate into carbonated soft drinks. concentrate into carbonated soft drinks.

• Either owned by concentrated producer or franchised to sell the brands of Either owned by concentrated producer or franchised to sell the brands of concentrated producers.concentrated producers.

• Franchise bottlers can: Franchise bottlers can:

1.1. Package and distribute product is defined territories. Package and distribute product is defined territories.

Not allowed to market a directly competitive major brand. Not allowed to market a directly competitive major brand.

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SWOT Analysis SWOT Analysis

STRENGTHS•4th Largest soft drink marketer in the US.•High name awareness in the markets served by existing and new bottlers.•High brand awareness in big cities

WEAKNESSES•Possible cannibalization with Sunkist•Low advertising compared to competitors•Low market share•Low market coverage•(one more)

OPPORTUNITES•American consumers drink more soft drinks then tap water.•Market for diet products has increased over the years•Many different ways to advertise and promote

THREATS•More than 900 registered brand names for soft drinks in US.•Cola accounts for slightly less than 2/3 of total carbonated soft drink sales•Entrance of PepsiCo Mandarin Orange Slice could take market share. •Minute Maid and Mandarin Orange slice accounted for 84% of all advertising expenditures in the orange category.

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Consumer AnalysisConsumer Analysis Married women with children under the age Married women with children under the age

of 18.of 18.

Respond favorably to price. (use of point-of-Respond favorably to price. (use of point-of-sale promotions, displays, etc.)sale promotions, displays, etc.)

Purchases are somewhat seasonal. Purchases are somewhat seasonal. • Sales are slightly higher in the summer Sales are slightly higher in the summer

monthsmonths

Diet products are more pronounced among Diet products are more pronounced among consumers over 25 years old while consumers over 25 years old while teenagers and younger consumers drink teenagers and younger consumers drink regular soft drinks. regular soft drinks.

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Competitor AnalysisCompetitor Analysis

Market Share

PepsiCo- Mandarin Orange Slice=20.8%Cadbury- Sunkist= 14.4%Coca Cola- Minute Maid Orange= 14%Cadbury- Orange Crush= 7.5%

Position

-Minute Maid Orange- emphasis on its orange flavor (18-34)-Sunkist- focused on the teen lifestyle (12-24)-Orange Slice- focused on the contemporary youth culture (18-24)-Crush- focused on their bold imagery with thirst quenching benefits (13-29)

Variety of Merchandising Promotions Used

-“Dealer loader” is a premium given to retailers-End-of-aisle displays/other types of free standing displays-Shelf banners-Sponsorships of local sports and entertainment events, plastic cups and napkins featuring the brand logo-Coupons, on-package promotions, and sweepstakes

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Corporation AnalysisCorporation AnalysisDec. 12th 1989

• Cadbury Schweppes PLC (London, England)

•Beverage Division: Cadbury Beverages, Inc. (Stamford, Connecticut)

•Product’s Sold Include: Tonic Water, Club Soda, Ginger Ale, Root Beer, Sunkist, Crush, Mott’s Apple Juice.

•World Wide sales of $4.6 billion in 1989

•One of the World’s Largest Multinational Firms. 4th largest soft drink marketer in the United States. 3.4% market share.

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Additional QuestionsAdditional Questions

3-What is Cadbury Beverages relative competitive 3-What is Cadbury Beverages relative competitive position in the U.S. soft drink industry? in the position in the U.S. soft drink industry? in the orange category?orange category?

•Bold User Imagery with thirst quenching Bold User Imagery with thirst quenching benefit. benefit.

Teens 13-29. Teens 13-29.

• “ “Dont Just quench it, CRUSH it.” Dont Just quench it, CRUSH it.”

• Two Liter 64%, Cans 31%Two Liter 64%, Cans 31%

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Odd FactsOdd Facts

• Clayton J. Howell included the word "crush" Clayton J. Howell included the word "crush" in the original soft drink's name to refer to in the original soft drink's name to refer to the process of extracting oils from oranges.the process of extracting oils from oranges.

• Crush Cherry made its debut in 2010, Crush Cherry made its debut in 2010, continuing Crush's spectacular growthcontinuing Crush's spectacular growth

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Our Our RecommendationsRecommendations

1. Re-Establishing the bottling network.1. Re-Establishing the bottling network.

2. Advertising and Promotion Program 2. Advertising and Promotion Program

(Objectives, Strategies, Expenditures)(Objectives, Strategies, Expenditures)

3. Consumer Advertising Vehicles3. Consumer Advertising Vehicles

(Make sure positioning is consistent with previous (Make sure positioning is consistent with previous positioning) positioning)