DR PEPPER/SEVEN UP INC.SQUIRT BRAND

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BACKGROUND

• Brand Manager in 2001 - Kate Cox• Drafting the brand’s annual advertising and promotion

plan.Caffeine-

free

low-sodium

carbonated soft drink

Squirt

BACKGROUND

• Squirt was the best selling carbonated soft drink brand in the US.

• Both issues were highlighted in June 2001

Squirt’s advertising and promotion

development plan

Product position

Market targeting

MARKETING CONTRACT

Contract was given Foot Cone & Belding Brand Agency.

Coca-Cola and Pepsi-Cola was the major competitors and the company (Foot Cone) took this into consideration.

Dr Pepper/Seven up was consistently ranked among the top-ten soft drink brand in the US.

SOFT DRINK INDUSTRY IN THE US

• U.S. consumers drink more carbonated soft drinks than tap water.

• In 2000 Americans consumed 53 gallons of soft drinks per person compared with 47 gallons in 1990.

• Carbonated soft drinks market of $60.3 billion in 2000.

INDUSTRY STRUCTURE

Three major participants in the production of CSDs:

• The Coca-Cola Company, the Pepsi-Cola Company & Dr Pepper/Seven up, INC were the three major concentrate producers in the U.S.

• Bottlers convert flavor concentrate into carbonated soft drinks.

• There were 500 Bottlers in the US.

•Concentrate Producers1.

•Bottlers2.

•Retail Outlets 3.

INDUSTRY STRUCTURE

Classification of Bottlers:1) Own or have an equity2) Franchise their brand 3) Independent bottlers.

INDUSTRY STRUCTURE

Types of Retail Outlets: 1) Supermarkets2) Conveniences stores3) Vending machines4) Fountain services5) Mass merchandisers6) Small retail stores

INDUSTRY STRUCTURE

Soft drinks were typically sold in bottles and cans except McDonalds which mixes syrup with carbonated water for immediate consumption by customers

COMPETITION IN THE SOFT DRINK INDUSTRY

Major three companies command 90% CSD sales in the US.

44.1

31.4

14.7

9.8

Market Share

Coca Cola Co.Pepsi ColaDr Pepper/Seven UpOthers

COMPETITION IN THE SOFT DRINK INDUSTRY

Top-Ten CSD. Companies and Brands in 2000

COMPETITION IN THE SOFT DRINK INDUSTRY

Top-Ten Soft Drink Brands in 2000

SOFT DRINK MARKETING

Soft drink marketing is characterized by:• Heavy investment in consumer advertising and promotion,• Selling and trade promotion to and through bottlers to retail

outlets• Consumer price discounting• Concentrate producers usually assume responsibility for:

- developing national consumer advertising and promotion programs

- Product development and planning- Marketing research

SOFT DRINK MARKETING

• Comparative Income Statement for the typical flavored concentrate producer & soft drink bottler in the us (per standard twenty-four 8-ounce bottle case

• Packaging represent the major element of bottler’s cost of goods sold

BRAND AND FLAVOR COMPETITION

• More than 900 registered brand name for CSD in the US.

• Changing composition of the U.S. population has been an important factor in the growing popularity of flavored CSD.

DEMOGRAPHIC OF SOFT DRINK CONSUMPTION

• 30% increase in sales from 1990 to 2000.• 849 eight-ounce servings of carbonated soft drinks

annually. • Consumed by American who are b/w 20 to 49 years. • 20-49 years, It is the largest segment of the US

population.• Diet soft drinks is more pronounced among over 25

years.

DEMOGRAPHIC OF SOFT DRINK CONSUMPTION

• Primary audience for soft drink marketing were Teens

• Taste and brand preferences are formed between the age 12-24.

• Higher consumption of soft drinks is among Hispanic and African American.

• More consumption among teens than adults.

SQUIRT BRAND HERITAGE & MARKETING

HERITAGE & MARKETING

• Brand’s origins are found in the Great Depression of the 1930s.

• Marketed by Dr prepper/Seven inc. since 1995.• It seemed to squirt onto the tongue just like

squeezing a grape fruit• Squirt sales since 1995• Required less fruit and less sugar to produce• Sales grew during Second World War• Exceeded reacquisition levels due to a broadened

bottling and distribution network• Increased marketing attention and investments.

SQUIRT MARKETING

Squirt Unit Sales Volume (millions of Cases)

SQUIRT MARKETING

• Bottled & sold by 250 bottlers in US

• Five Bottler Markets Accounted for 50% of squirt case sales volume – Los Angeles(30%),

One Third Independent Franchised Bottlers

Two third- Affiliated with Coca Cola/Pepsi

SQUIRT MARKETING

• Squirt Product Line and Competitive Brandconsists of:

• Squirt competed directly with Coca Cola’s two carbonated grapefruit soft drinks – Fresca & Citra

• In broader Citrus flavored soft drinks it competed with – Mellow Yellow & Surge(Coca Cola), Mountain Dew(Pepsi), SunDrop(DPSU)

Regular and diet squirt

Regular and diet Rub

y Red Squi

rt

SQUIRT ADVERTISING & PROMOTION EXPENDITURES

Media include:1) Newspapers2) Spot of television3) Cable television4) Spot radio5) Retail6) Consumer7) Trade promotion

SQUIRT ADVERTISING & PROMOTION EXPENDITURES

Coca-Cola and Pepsi-cola spend more on media advertising and promotion than does Dr Pepper/Seven Up.Mountain Dew – Most heavily advertised Brand

POSITIONING STRATEGIES

1 • Attribute or benefit

2 • Use or application

3 • Product or brand user

3 • Product or service class

3 • Competitors

3 • Price or quality

SQUIRT POSITIONING

• Squirt positioning was addressed after Cadbury PLC acquired the brand.

• In 1994, Foote, Cone & Belding recommended that Squirt’s unique thirst quenching attribute should be the dominant positioning dimension.

Target market of :Squirt – 18 to 44 years oldRuby Red – Fruity bold way to refresh your thirst, targeted at

teens & young adults of 12 – 24 years

TARGET MARKET & POSITIONING RECOMMENDATION

1995 Foote, Cone & Belding was asked to revise it is creative strategy.

The reason was the execution “was a bit too intense to fit with brand”

Image of squirt was portrayed in –“spunky, lively, sociable, colorful & Music Driven”

The target market was narrowed to adults, 18-34.Fun relief when you are dry

Squirt Positioning and Creative execution was revisited again 1999 following the introduction of Citra by Coca-Cola

PERCEPTUAL MAP OF BRANDSMountain

Dew

Citra

Squirt

Fresca

Sundrop

Mellow Yellow

Surge

Refreshing

Thirst Quenching

Young, Cool & Hip

Not so young, cool & Hip

TARGET MARKET & POSITIONING RECOMMENDATION

Based on new research results featured Squirt’s consumption by racial/ethnic group and age in 2000, Foote, Cone and Belding recommended:

Squirt should be targeted at multicultural, 18-24 years old.

THE HISPANIC MARKET OPPORTUNITIES

Demographic of Squirt Consumption

Hispanic12%

African-American

15%

Caucasian73%

THE HISPANIC MARKET OPPORTUNITIES

Demographic of Squirt Consumption

<6 6-12 13-19 20-29 30-39 40-49 50-59 60+0

5

10

15

20

25

30

CSD users Squirt users

Age

Volu

me

Inde

x

THE HISPANIC MARKET OPPORTUNITIES

• Kate Cox met the brand management. • The meeting concluded with an assignment given

to Jaxi Stollenwerck, the associate brand manager for Squirt.

• The assignment to prepare a profile of Hispanic and African American consumers in the United States from recently released U.S. Census 2000 data and other relevant sources

JAXIE’S REPORT

• Hispanic population increased by 57.9% from 1990 to 2000.

• 22.4 million in 1990 to 35 million in 2000.• 58% Mexican origins• 9.6% Puerto Rican• 3.5% Cuban• 8.6% central or south American• 19% Hispanic Origins not classified

JAXIE’S REPORT

• Hispanic accounted for 12.5% of the American population.• African Americans accounted for 12.3% of the US population• More than 75% of the Hispanics live in the southern &

western USA• More than half of all Hispanics live in California & Texas• 35% of Hispanics were under 18 years while 25.7% of overall

US population were under 18• Median age for Hispanics was 25 years while for US in

general, it was 35.3 years• 55.4% of Hispanic prefer to see & hear ads in Spanish• Strong brand link with heritage among Hispanic• Hispanics don’t like hard sell approaches• Prefer shopping close to home

SQUIRT ADVERTISING & PROMOTION PLAN DEVELOPMENT

• In mid-summer 2001 Kate Cox Assembled the team.

• They begin drafting the annual advertising and promotion plan.

• The plan would be formally presented to senior management for review and approval.

SWOT ANALYSIS

Strengths• Bell weather in grape fruit soft Drink•Premier brand recognition in the market•Squirt has good power over its suppliers•Owns 2 brands out of top 10

Weaknesses•Smaller advertising budget due to smaller market share•Stinging competition either in same or different categories

Opportunities•Expanding Hispanic population would increase sales of squirt•Intention to enrolling into a new market in other countries to expand market share

Threats•Competitors ‘ advertises a lot to maintain market share•Customers have bargain power in the market

RECOMMENDATIONS• Target younger generation- 18-24 years• Continuous R & D• More advertising and promotion

Promotion1. Increase in

advertising budget

2. Direct marketing and

Public Relations

Product1. Product design

2. Product Quality

3. Product Features

4. Branding

Price1. Price

discounts and Special Offers

2. Reduce production cost

PlaceSupermarket,

convenience stores, vending machine,

fountain service, mass merchandisers and

retail outlets