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Mktg 658 - Snapple Case Study

Essay by   •  November 18, 2018  •  Case Study  •  529 Words (3 Pages)  •  854 Views

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MKTG 658 Snapple Case Write-Up

Da (Melody) Yang

  1. Brief Background

In 1994, Quaker acquired Snapple at the height of its popularity for $1.7 billion. Quaker made a series of changes, disaffecting Snapple’s most loyal customers and tarnishing the brand’s image, resulting in declining revenue. In 1997, Triarc acquired Snapple for $300 million.

  1. Decision Dilemma

Mike Weinstein, CEO of Triarc Group, needed to decide on the marketing strategies that could revitalize Snapple Brand.

  1. Contradictions/Missing Information/Personal Insights

In 1997, Snapple’s revenue was over $400 million, but Quaker sold it at $300 million. Quaker’s chairman and president also resigned because of the fallout. Was the decline of Snapple’s sales caused by some management problem besides the improper marketing strategies?

  1. Decision Options
  1. Recover previous brand image
  2. Reposition Snapple as a mainstream brand
  3. Geographic expansion

  1. Decision Options Pro and Con
  1. Recover previous brand image: focus on product development to recover “quirky”, “innovative” image

Pros

Cons

Maintain core competency, and the brand image was proved to be successful before

May be hard to recover broken image

New products can stimulate bored loyal customers and attract new consumers

R&D of new products can be costly and time consuming

Snapple can replace the underperforming flavors with successful new flavors to boost profits

R&D costs may squeeze the budget for marketing promotions

  1. Reposition Snapple as a mainstream brand: compete with others by lower price and more promotion

Pros

Cons

Mainstream is a larger market than “fashion”, which will enlarge customer base

Competition in mainstream market is getting more and more fierce

The definition of “fashion” and “innovative” changes quickly and largely; mainstream is a safer choice

To lower price, Snapple needs to fix the problem of high distribution costs

Money saved from developing new products can be spent on broader marketing methods

Snapple has to come up with new promotional strategies based on new positioning

  1. Geographic expansion: expand the brand to regions with low brand recognition before

Pros

Cons

Enlarge customer base and therefore increase sales volume

It’s hard to enter a new market with established competitions

There is almost no rumor about Snapple’s previous fallout in undeveloped markets, so no trouble about fixing broken image

Compared to consumers in coastal cities, consumers in undeveloped markets may be less sensitive to the “quirky” and “fashion” brandings

Enlarge distributors/retailers base, become a more nationalized brand

If Snapple has to apply different strategies or pricings due to different customer characteristics in different regions, brand image will be further diluted

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