Dr. Pepper Snapple Group Inc. - Energy Beverages

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Brand Positioning:

The brand message can be addressed to young teens and adults in general who spend a lot of time doing mental & physical activities such as studying or working for long hours causes tiredness. Mental alertness, taste and refreshment is a necessity of both genders. The product should be projected as a product that provides instant energy that helps in doing daily activities more efficiently.

Marketing and Promotions:

Between the two options of investing in media advertisements and other methods such as sponsorship, website and events, media advertisements are more expensive but also more effective. Promotions through events, sponsorship and website can attract only limited customer segments. Since the target customer segment is a broad segment, spending money on media advertisements is critical for successful product launch.

Retail Channels:

The company management strategy already includes plan for increasing vending machines and equipment in on-site premises. The case mentions that the growth is slowing down for on-site premises and the trend is going to continue in future. On the other hand, supermarkets are showing growth in sales amount. However, considering the competitive nature of the industry, if the product doesn’t sell well in the first few days, supermarkets tend to unstock the inventory. The risk is too high to put all the stake in the supermarkets first. It is better to launch the product in the Convenience stores first and if it succeeds then gradually extending into Supermarkets.

Price:

Other beverages are priced at around $2.00 irrespective of the size of the drink except Red Bull. It is a safer option to keep the price competitive with other brands but little higher to reflect the higher value. Since, Dr. Pepper Snapple Group Inc. has well established manufacturing/ bottling facilities and a strong distribution channel, they can adjust their manufacturing capacity to manufacture this additional product with modest investment (fewer fixed costs). There are fewer dependencies caused by the suppliers or third party vendors to bottle the products and distributors.

Implementation:

Firstly, the company should focus only in the US market first. Additional market research is needed to identify the precise preferences of the target segments since a major percentage of the end users are not going to be the actual buyers.

Secondly, since nearly half of the target segment will buy the product under supervision of parents, the company has to develop marketing and promotion campaigns that will educate not just the customers but also their parents about the benefits of this new drink such as mental alertness, refreshment, etc. The marketing campaigns have to effective and aggressive since it is a totally new market for Dr. Pepper Snapple Group Inc.

Thirdly, the company can begin with the proven high profit margin channels first like vending machines, convenience stores and small retail stores. In addition, they can also explore additional channels such as school cafeterias.