Ravi Sockalingam, PhD
Dr Pepper Snapple Group, Inc.’s brand manager Andrew Barker was tasked with recommending the company’s top management if it should decide to introduce a new branded product into the energy beverage market.
A brief overview of the company’s position
Dr Pepper Snapple Group, Inc. maintains a well-entrenched position in the flavored carbonated soft drink (CSD) market. In 2007 he held a market share of the US CSD market. And this share had been steadily growing year to year. The company is also a leader in the non-CSD drink category that comprises ready to drink tea, juice, juice drinks, enhanced water, drink concentrates and mixer categories. In addition …show more content…
The market landscape has also become competitive. Red Bull still holds the number one position in terms of sales and volume even though its market share had almost halved in just 6 years. Competition and an explosion of product choices have eroded the price of energy drinks. The price has dropped down to $2.00 per single serve, and the larger single serve packs are priced even lower per ounce. The availability of multi packs and bigger single serve packages have driven process downward. Competitors have also been targeting various market segments with different products. Different energy drink products targeted at different demographic segments – women, young Hispanic men, people over the age of 21 (drinking age).
Despite its robust integrated business model, and despite being a leading bottler and distributor in the beverage industry, the company does not seem to have access to all regions of the US especially in the off premise retail channels where the profit margins are the highest.
The new product that Dr Pepper Snapple Group Inc. brings to the market has to bring functional benefits to the consumers. It should consider adding vitamins proteins to the energy drink in an effort to bring more value to its customers. This strategy has been tried with success by the company with its sport drinks offerings. The younger demographic (aged between12 and24) constitute 65% of consumers of energy drinks. In terms of ethnicity, Hispanic and African Americans are by far