Snapple Case Study

Problem:

Develop a strategy for Snapple's recovery after a three year trend of declining sales under the management of Triarc Companies. Sales had declined almost 35% in three years (from $674 MM in 1994 to $440 MM in 1997) and had the profile that the company had achieved great success with was diminished.

Issues

History:

* Small company origins based on authenticity and trust in consumers eyes. (ref. Exhibit 6 - Pivotal Characteristics) This was evident in the initial mantra of the company "100% Natural" even before the company became Snapple (Unadulterated Food Products, 1972).

o The purchase by Quaker and subsequent changes left the consumers feeling betrayed and left the impression of Snapple "selling-out".

 Replacement of spokesperson ("Wendy") and termination of contracts with radio personnel (Howard Stern) produced bad press and continued

* Distribution and subsequent growth of brand from 1987 to 1994 was in large part due to the growth of the network of small family owned distributors.

o Quakers attempts to have the distributors cede their supermarkets in exchange for Gatorade distributor rights in the cold market (deli's, restaurants, etc...) was met with opposition and resulted in conflicting distribution channels.

o Upsetting the distributors that had been responsible for the growth of the cold market had potential disastrous effects on your over all business. In the alternative beverage category 94% of the wholesale dollars is spent outside of the supermarket sales. (See Exhibit 2 and 3 which indicate that only $0.3 B is spent in supermarkets as opposed to a total of $5 B spent in the overall category.)

Industry/Market

* The market that Snapple products compete in is the Alternative Beverage category. This is a very competitive market with types of beverages within the category varying from water to sports drinks to straight fruit juices. With this variety within the category makes it difficult to identify the competition and to seize on the popular trends.

o As indicated in Exhibit 6, the Snapple products are part of a 'fashion' brand with usage fluctuating seasonably and within the social environment. This would indicate that Snapple needs to be very flexible to react to the perceived popularity of the trends and needs within the market.

* Although a Snapple drinker can be profiled (see Exhibit 6) the reason for the attraction to the product varies and may be due to one of many factors. In many key categories Snapple's appeal is on middle ground and is difficult to differentiate itself from others within the category.

o The irreverent fun of the brand and appeal to the consumer at a personal level has to be restored. As indicated the actual 'small company' does not have to be restored but the sense of a 'caring' company does need to be reinforced.

Consumer

* In general the Snapple consumer sees themselves as quirky or offbeat and seeks a product that reinforces that image. Although the profile outlined in Exhibit 6 indicates that the average consumer is active and interested in improving themselves.

Marketing Mix

* Snapple grew as a single serving beverage with a lot of variety in selection. This was backed by the research "The Cultural Logic o the Snapple Brand" (Exhibit 6). In that study the consumer indicates that its usage is primarily "single bottles for immediate consumption". It also indicates that it is individualistic and not families drink.

o With the purchase by Quaker larger pack sizes were introduced. This didn't appeal to the general consumer and caused problems in the distribution channel and display areas which had been established.

Marketing Plan

To restore the Snapple brand to a position of success, changes have to be made to restore the company image to what had made it successful in its growth period of 1987 to 1994. The company had an image of fun and irreverence that was supported through the marketing campaign of 100% natural - no matter how the results were. To properly restore this image