CRUSH//Drew Lawrence // Allison Collins//

//Amanda Ferreri // Merissa Wadel//

ORANGE

Company History

• Began in 1783 in London- Schweppes• Merged with Cadbury in 1969• Cadbury Beverages Inc. is the beverage

division of Cadbury Schweppes• World’s third largest soft drink marketer• Products located in 110 countries

Case Background

• Crush was bought by Cadbury from Procter & Gamble

• Procter & Gamble had been going to a warehouse distribution which caused them to lose some of their bottlers

• Cadbury is relaunching Crush back into the market

Strengths•Strong brand awareness for orange soda•World’s 3rd largest soft drink marketer•Consistent marketing through Schweppes brand name to extensions•Focusing on orange flavor because it makes up 2/3 of the crush volume

Opportunities•Continue to expand # of bottlers in market area•Soft drink consumption rising

Weaknesses•Market overlaps Sunkist market•Only 75% market coverage•Only 8% share of orange soft drink market•Haven’t marketed Diet Crush as well as other companies have marketed their diet orange soda

Threats•Competition

• Orange Slice by PepsiCo• Healthier drink choices

SWOT Analysis

Target Market

• Crush targeted at teens and households w/ children at home

• Individuals ages 13- to- 29

Product

• Crush soft drink brand• Sold in cans and bottles

• In 1989, Orange Crush controlled 7.5% of the orange-flavored soft drinks category

Place

• Supermarkets, convenience stores, vending machines, fountain service, and thousands of small retail outlets

• Supermarkets account for 40% of carbonated soft drink industry sales

Promotion

• Crush promoted most frequently on spot television, in newspapers, and on outdoor signage

• Sunkist: newspapers, spot television, outdoor billboards, and some syndicated television

Promotion cont

• Coupons, on-package promotions, and sweepstakes

• Sponsorship of local events, plastic cups, baseball hats, and t-shirts

• “Display Loader”: part of

point-of-purchase display– Ice chests, insulated can coolers

Price

• Concentrate pricing differed very little among competitors– Typically less than one-cent difference

BCG (Boston Consulting Group) Model

• For portfolio planning– A company should maintain a balance of high

growth and low growth products• To prioritize which products within the

company product mix should get more funding and attention

• To classify products

BCG Matrix (Model)

The Perfect Portfolio

• High-growth:– New product– High effort and high resources (to build up)– Expected to bring high profit in the future

• Low-growth:– Established product known by the market– Characteristics do not change a great deal– Customers know what they are getting– Price does not change a great deal– Limited marketing budget– “the milking cow” bringing constant cash flow

Four Categories

• Star: (high growth, high market share)– Leaders within the

business but still need a great deal of support (promotion and placement)

– If the market share is maintained the product will eventually become a cash cow

• Star: CRUSH (orange)– Crush is #1 in market

coverage of orange soda among competitors from 1985-1989

– Since acquisition in 1989, promotion and advertising is being focused on maintaining this market share

Four Categories

• Question Mark:(high growth, low market share)– Products are in growing

markets but have low market share

– Essentially new products that buyers have yet to discover

– Strategy is to get consumers to adopt these products

– High demand and low return due to low market share

– Must increase the market share quickly or they become dogs

• Question Mark: CRUSH (flavored line extensions)– This is a market that is

growing but flavored soda (other tan orange)holds a small % of market share

• 1.1%

– Few competitors– Although people choose

Crush flavored soda due to few competitors the return is low due to low market share

– The goal is to get more consumers to drink flavored soda and become a star

Four Categories

• Cash Cow: (low growth, high market share) IDEAL PRODUCTS– High market share in a

mature market– With a competitive

advantage the products have high profit margin with high cash flow

– Due to low growth, promotion, and placement investments are low

– Increase in infrastructure may improve efficiency and increase cash flow

• Cash Cow: GINGER ALE (Canada Dry)– Introduced in 1870 – Constant growth in a

mature market maintaining the top spot in sales of Ginger Ale in the United States

– Investment in this product are low

– With increase in promotion and advertising consumer awareness may increase cash flow

Four Categories

• Dog: (low growth, low market share)– In low product market with

low market share– These products should be

avoided and minimized– Expensive turn around

plans do not help

• Dog: Strategy to avoid these products– Focus on the flavored line

extensions of Crush• With the small market share

going toward flavored soda any investment in the infrastructure of these products will create a negative profit margin

BCG Problems

• Limited knowledge of other products or how original data was collected

• High market share does not always indicate profitability

• Low share products may also be profitable• Model does not show overall market

growth• Market growth is not the only indicator of

market attractiveness

Positioning

• Market share has decreased 10% in 4 years

• Decline Stage• Cadbury could discontinue Crush and

focus on Sunkist, but…

ORANGE

• Opportunities• Research• Assets• New Offerings• Goals• Execution• implEmentation• Execution

Opportunities

• Are there any trends or untapped markets?– Healthy angle– Older population

Research

• Conduct (Research Method); compile useful information– Determine how health conscious (orange)

soda consumers are.• Parents buying healthy for kids?• Adults

Assets

• What should Crush keep?– Great orange taste– Thirst-quenching– Caffeine-free– Fun image (not necessarily heavy on “youth”)– Diet is already an option for the health

conscious

New Offerings

• Should help fulfill Opportunities– Health & Adult Appeal

• Vitamin C• Calcium?• Entire new formula?

General Expenses

• What costs would be incurred for this repositioning?– Research expenses– New formula could be very expensive– Brand new advertising and promotions

expenses• Is it worth it?

Execution

• Introducing the new Orange Crush. The healthiest orange soda at your grocery store.– Now with Calcium and Vitamin C to keep your

body strong.– How strong?