CRUSH C`s - Courtney Pope

CADBURY BEVERAGES Miles Anderson  Steven DiPalma  Jesse Glendinning  Patrick Nathanson  Courtney Pope  Chandra Simmons 

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Cadbury Schweppes – world’s first soft drink maker Fourth largest soft drink marketer in United States  Coca-Cola (1), PepsiCo (2), Dr. Pepper/Seven Up (3)  3.4 % carbonated drink market share 1989 acquisition – Crush would account for 20 % of Cadbury Beverage sales Production and distribution: concentrate producers, bottlers, and retail outlets Principal retail channels: supermarkets, convenience stores, vending machines, fountain services, and small retail outlets  Supermarkets account for 40 % of sales – key to a successful marketing effort

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Competitors in orange-flavored soft drinks: Mandarin Orange Slice (PepsiCo), Sunkist (Cadbury), Minute Maid Orange (Coca-Cola) $26 million spent on advertising by four major brands  84 % of spending from Minute Maid and Mandarin Orange Crush spent less on advertising with fewer vehicles  Spot Television, newspapers, outdoor signage Very little pricing difference between four major brands (no more than one cent) Variety of merchandising promotions  Dealer Loaders, sponsorships, coupons, sweepstakes, on-package promotions

SUMMARY 

January 1990 – strategic marketing decisions for Crush brand Focus intitial attention on orange flavor  Reesetablish bottling network – make Crush available in 75 % of total sales markets 

PROBLEM DEFINITION

PROBLEM DEFINITION Purchased Crush soft drink brand from Proctor & Gamble for $220 million.  Manage the relaunch of Crush.  Three issues: 

Reestablishment of a bottling network.  New positioning stance that incorporates flavor line.  Development of an advertising and promotion program. 

3 C’S

COMPANY  Cadbury

Beverages, Inc. is the beverage division of Cadbury Schweppes PLC.  Sold in 110 countries.  Cadbury Schweppes PLC headquarters in London, England.  Cadbury Beverages, Inc. headquarters in Stamford, Connecticut.  World’s first soft drink maker in 1783.  Owns Canada Dry, Schweppes, Sunkist, among others.  3.6% market share in soft drinks.

CONSUMERS

SUNKIST Target Market  Teens, 12-24  Households with 34 children  Positioning  “Teens on the Beach”  “Drink in the Sun” 

CRUSH Target Market  Teens, 13-29  Households with 35 children  Positioning  “Don’t just quench it, CRUSH IT” 

COMPETITORS Coca-Cola (Minute Maid Orange)  PepsiCo (Mandarin Orange Slice)  Dr. Pepper/Seven Up 

Top 10 Soft Drink Brands

MKT SH

1. Coca-Cola Classic

19.8%

2. Pepsi-Cola

17.9%

3. Diet Coke

8.9%

4. Diet Pepsi

5.7%

5. Dr. Pepper

4.5%

6. Sprite

3.7%

7. Mountain Dew

3.6%

8. 7Up

3.2%

9. Caffeine-free Diet Coke

2.5%

10. Caffeine-free Diet Pepsi

1.6%

Top 10 Brands

71.4%

Other Brands

28.6%

SWOT Strengths High name awareness in markets served by existing and new bottlers Highest orange brand awareness in key metropolitan areas- (Seattle, San Francisco, New York City, Los Angeles, Chicago, Boston

Weaknesses Poor bottling network due to Procter and Gamble’s switching to warehouse system Changing brand positioning Poor Diet Sales Market coverage of only 62%

Opportunities Increase Orange Crush market shares Increase market coverage once bottling network is re-established Market coverage would increase to 75% once the bottler network is established

Threats Three big competitors (Sunkist, Mandarin Orange Slice, and Minute Maid Orange) all have higher brand market shares Low loyalty compared to other competitors Every other competitor in the category has higher market coverage percentage

COMPANY High name awareness  Highest orange brand awareness  Poor bottling network  Spend less on advertising and used fewer advertising than two biggest competitors (Minute Maid Orange and Mandarin Orange Slice) 

COMPETITION Mandarin Orange Slice and Minute Maid Orange have highest brand loyalty  Mandarin Orange Slice and Minute Maid Orange two biggest competitors  Every other competitor in the category has higher market coverage percentage  Every other competitor has higher brand market shares 

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CUSTOMERS Latest positioning targeted towards ages 13-29 with a tagline of “Don’t just quench it, Crush it”  Household size of purchaser is 3-5 people with children at home  2 liter accounts for 64% of sales while cans account for 31% and 5% is other  46% customer loyalty 

ALTERNATIVE COURSES OF ACTION 

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Develop an efficient distribution network (bottlers, retailers). This is one of the key success factors in the soft drink industry. Crush is targeting teens 13-29 with its current positioning; we suggest reworking this position to target mainly young families with children. With a target market of 18-30 Crush can fight for market share without cannibalizing that of Sunkist. We also suggest that Crush return to a position that emphasizes on its great natural taste. This would appeal to the young family and ensure once again that Crush was not cannibalizing Sunkist teenage market.

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Crush ran similar ads in the early 80’s and had success with the young family market. New ads would focus on the great natural taste of crush and be run in a variety of media with special attention given to point of purchase displays, end cap shelving, and coupons and discounts for the customers. (Given 60% of sales come from supermarket sales) Crush could also run an ad campaign that depicts alterative times and places to enjoy orange soda and would focus on increasing the orange soda market s share of 3.9%. This would need to be done carefully however to avoid having an all out price war with some of the larger soda companies, (coke and pepsi).

QUESTION 1

QUESTION 2

3-WHAT IS CADBURY BEVERAGES RELATIVE COMPETITIVE POSITION IN THE U.S. SOFT DRINK INDUSTRY? IN THE ORANGE CATEGORY? 

Cadbury Beverage has a strong competitive position in the Soft Drink Industry. It is the world's third largest soft drink marketer behind Coca Cola and PepsiCo. Cola flavored sodas do account for 65.7% of market share, however orange flavored soda accounts for 3.9%. There are three other brands that compete against Cadburys Sunkist and Crush to dominate a large portion of the orange-flavored soft drink sales. These competitors include PepsiCo's Mandarin Orange Slice, and Coca-Cola's Minute Maid Orange. in 1989,Cadburys Orange Sodas were not as high on market share as their competitors,Sunkist (14%) and Crush (8%), Slice (21%) and Minute Maid Orange (14%). Crush postitioned themselves to teens ages 13-29 using the statement " Don't just quench it, Crush it" to attract their consumers.

4-BASED ON YOUR ASSESSMENT OF THE 4 SOFT DRINK INDUSTRY, THE ORANGEFLAVORED CATEGORY, AND THE COMPETITIVE SITUATION OF CADBURY BEVERAGES AND ORANGE CRUSH, WHAT IS YOUR RECOMMENDATION FOR POSITIONING ORANGE CRUSH? Crush is targeting teens 13-29 with its current positioning; and its sister company Sunkist is targeting teens ages 1224. we suggest reworking Crush's position to target mainly young families with children. We believe that with a target market of 18-30 Crush can fight for market share without cannibalizing that of Sunkist. We also suggest that Crush's reposition emphasizes its great, natural, taste. We believe this would appeal to the young family and ensure once again that Crush was not cannibalizing Sunkist's teenage market.