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SNAPPLE
In this case the important question is: “What should Mike Weinstein do?” However, to address this question it is best to look at the history of Snapple and consider the following issues:
In the period of 1972 to 1993, why do you think that Snapple flourished when so many small startup premium fruit drinks stayed small or disappeared? Explore each of the Four Ps (as you decide where to give credit).
Now look at the period from 1994 to 1997. Did Quaker make an error in buying Snapple or did they manage it badly?
Roll forward to 1998. What can Triarc’s managers learn from Quaker’s experience? What can they apply from their own experience? Is the Snapple target market “anyone with lips?” Is it ok that Snapple “ends up meaning lots of different things to lots of different people?” What are the riskis and rewards of leaving “what the brand stands for” open to consumers’ interpretations rather than a strong positioning on it? And what does it mean to say that Snapple is a fashion brand?
Identify the three highest [priority initiatives you would start tomorrow if you were in Mike Weinstein’s shoes. Justify them.
The Snapple Case Analysis
Case Problem Statement
The Snapple brand created in 1972 by Arnie Greenberg, Leonard Marsh and Hyman Golden had been built from nothing to sales of $674 million per year by 1994. At the time, Quaker was seeking to grow its beverage business which only consisted of the Gatorade brand. In 1994 Quaker bought Snapple for $1.7 billion. Quaker attempts to boost sales by loosely applying the similar techniques used on Gatorade and fails. Under Quaker control, the yearly sales of Snapple products decline to $440 million in 1997. The Snapple brand is sold to Triarc Companies for $300 million. Mike Weinstein of Triarc Beverage Group has been put in charge to reinvigorate the Snapple brand by growing its dwindling sales.
Strengths
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Strong appeal to the “alternative” beverage drinkers
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Consistent product and marketing image: always 100% natural and real
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Strong smaller local “cold channel” distribution channels. Distribution system (smaller/more personal) also linked with brand image
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Appeal to healthy, fun, creative people
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Provides a sense of uniqueness in a sea of mass produced products
Weaknesses
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Urban markets on east side of the country make up most of the sales
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The usage rate inconsistent — not customers users are “heavy” users
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Once a niche/alternative market now becoming mainstream
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Perceived as a fashion drink that has difficult emotional component to marketing
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Purchases typically are single serving bottles for immediate consumption not in cases
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Due to its emotional appeal, the sales sensitive to corporate image
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Small market distribution channels with contracts for life can limit the ultimate throughput volume
Opportunities
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Use the opportunity of buying to market the “Triarc small company” image like it was before
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Leverage the Snapple brand image of being small and anti-mass market
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Use the original founders as consultants and or for media marketing
Threats
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Additional tough competition in the “Alternative