Cadbury Beverages Case

Introduction

Marketing executives at Cadbury Beverages, Inc. wants to re-launch the following brands Crush, Hires, and Sun-Drop soft drinks but Cadbury has seen several challenges rise in the eve of their next attempt to lead the market. Senior marketing executives decided to focus generally on the Crush brand of fruit flavored carbonated beverages. The key issues that were foreseen by Cadbury executives were the rejuvenation of the bottling network, figuring out brand equity, and develop new positioning. Lastly, there are numerous opportunities available for Crush to take advantage of that I will discuss in this case that deals with new positioning towards a different segment and an needed rejuvenation of the bottling network.

Description of the Carbonated Soft Drink Industry in the U.S

The carbonated soft drink industry structure has three major participants that deal with production, distribution, and help market by developing trade promotions to the principal outlet. These contributors to the industry are concentrate producers, bottlers, and retail outlets. Cadbury beverages conduct in this industry is built by heavy investment in advertising, selling, and promotion.

The performance of the orange flavored industry represents 3.9 percent market share stacked up against the other major flavors in the industry (cola, lemon-lime, orange, root beer, ginger ale, grape, and others). Also, diet soft drinks represented 31 percent of industry sales in 1989. The typical buyers are married woman with children under 18 year old living at home (age of woman anywhere from 30-40, age of kid anywhere from 12-18). The reason why the typical buyer’s are married woman with kids is because the consumption of teenagers and younger consumers generally, were heavier consumers of regular soft drinks. Where the buyers are with the highest consumption of 54.9 gallons are in the East South Central States of Kentucky, Tennessee, Alabama, and Mississippi. On the other hand, states with the lowest consumption per capita of 37.1 gallons were Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, and Nevada. The highest consumption season of typical buyer’s is during the summer months.

Description of Changes in the Orange Category (1985-1989)

пÑ"? 1985

o Sunkist was the market leader in 1985 with a 32% market share (exhibit 5)

 Sunkist’s positioning focused on the teen lifestyle.

 Sunkist’s promotions were used newspapers, spot television, outdoor billboards, and some syndicated television.

 Sunkist was available in markets that represented 95% of total orange category sales.

o Crush was second in the market with 22%.

 One reason why there is large gap of (10%) market share between Sunkist and Crush could be that Crush has a larger target market span (teens, 13-29), and Crush is only available in markets that represented 81% of orange category sales.

 Mandarin Orange Slice and Minute Maid Orange tested the market of category by representing 10% each of orange category sales, and lead in advertising spending towards diet consumers.

пÑ"? 1986

o Introduction of Orange Slice and Minute Maid Orange into the orange category invigorated the category and has taken market share from other competitors.

 Advertising spending for broadcast and print media went up 22.7 million because of the introduction of these two brands.

 Mandarin Orange Slice lead in advertising spending towards their diet brand. Which may have resulted to faster head start of taking advantage of the diet user’s opportunity left open by the other three competitors and increasing their market share to 16% by the end of 1986.

пÑ"? 1987

o Sunkist market share decreased 7% from the past year to 13% due to…

 Decrease in advertising expenditures of a total $3102.3

 Decrease of availability in markets of 4% from the past year’s performance to 79%.

o Supermarkets increased in sales to a high of 131 million cases.

o Crush�s market share decreased 4% from the past year to 14% due to…

 The introduction of the two new brands resulted to monster advertising being done by the two making Crush’s advertising spending seem minimal.

 Decrease of availability in markets of 3% from the past year’s performance to 78%.

пÑ"? 1988

o With little stabilization trickling down the market share ranks Crush’s market share and advertising expenditures in the diet category go down.

 Crush’s market share decreased by 3%, which now stands at 11%.

 Market coverage has seen some stabilization for a year standing at 78%.

 Stabilization of market coverage may be due to increase of total advertising spending of $25,444.4.

пÑ"? 1989

o Different types of advertising vehicles were introduced in this year including;

 Broadcast