PGDM MAKRETING (2018-2020)
MARKETING MANAGEMENT-I
CASE STUDY REPORT : SNAPPLE
ASSIGNMENT BY:
NIKHIL LUNIA (201832072)
(SECTION-F)
COURSE INSTRUCTOR
PROF. SUBODH TAGARE
INTRODUCTION:
Snapple was a popular beverage brand in the USA and several other parts of the world. The
brand was launched by the Unadulterated Food Company in New York, in 1972. Over the
years, Snapple came to be known for its unconventional promotional efforts which earned the
brand a substantial fan following.
The Snapple Beverage Corporation became one of the first companies to enter the 'New
Age Beverages' market, which included non-carbonated drinks like tea and juices in the late
1980s. Snapple changed hands several times over the years. However, barring a few bad
years, the brand remained very popular among consumers.
This case discusses the growth of the Snapple brand under the management of the various
companies that owned it at different times. It also talks about Snapple's sales decline under
the management of Quaker Oats, and how Triarc, which took over the brand subsequently,
managed to revive Snapple's image before selling it to Cadbury Schweppes. The case
concludes with a commentary on Snapple's inability to become a leading beverage brand
despite its strong fan following.
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? (Could Snapple have
succeeded with the same actions in 1990’s?
According to me, the probable reasons why Snapple flourished when so many small startup
premium fruit drinks stayed small or disappeared between the period 1972-1993 are as
follows:
At the time, there was no shortage of upstart brands competing for the dollars of young,
health-conscious New Yorkers, but Snapple stood out from the rest by virtue of an endearing
artlessness. The labels on its bottles were cluttered and amateurish, and its ads seemed, if
possible, even more homemade.
Snapple realised the importance of product diversification at the correct time. It expanded
its product line from apple drink to other non-alcoholic beverage products at right time to
keep the individual distributors occupied. The product line was extended by adding:
Fruit flavoured iced tea.
Isotonic sports drink.
Carbonated drinks.
Vitamin supreme.
Diet juices.
Seltzers.
It increased the distribution network when it was most required. Snapple expanded the
distribution to New Jersey and Pennsylvania from New York which significantly increased its
profits.
After Carl Gilman was hired, he focused rightly on the aspects where Snapple sales were
hampering on the grounds of not so good label design and inept advertising. He improved
Snapple on these aspects.
Snapple decreased the strain costs by constraining distribution of its volume in super
markets to not more than 10%.
The three friends identified the popularity and need of ‘No preservative fruit juices’. And
throughout the thick and thin, Snapple sticked on to its mantra being ‘100% natural’.
No, Snapple would not have succedded with the same actions in 1990’s.
Now look at the performance collapse in period from 1994 to 1997. Did Quaker make
an error in buying Snapple or did they manage it badly? Why do you think so?
No, Quaker did not make an error in buying Snapple. Rather, it was the bad management of
Quaker that led to the performance collapse of Snapple in the period from 1994 to 1997.
To bring the brand to mainstream, it was a bad idea to change the Snapple brand image
altogether from ‘fashion’ to ‘lifestyle’.
Sacking of Howard Stern, Rush Limbaugh and Wendy Kaufman.
The large package size adopted was a bad idea based on the consumption preferences that
too while Snapple’s best sellers were at 16-ounce single serve.
Quaker had Snapple’s 300 distributors fly into several centralized meetings and proposed to
them that they cede Snapple’s supermarket accounts to Quaker in exchange for the right to
distribute Gatorade to the cold channel. In meeting after meeting, distributors resisted
Quaker’s proposals. They weren’t about to give up the supermarket accounts they’d worked
for years to win. And Quaker couldn’t force them to. Most distributors held contracts in
perpetuity. Despite protracted negotiations with individual distributors and distributor
councils, no channel rationalization was [Link] distributor sentiment was hurt with the
decision of handing over their distribution chain because distributors had more
independence and they have worked hard to build the super market accounts before Quaker
acquired Snapple. The inability of the management to come to a consensus with the
distributors proved to be a major management inefficiency.
Roll forward to 1998. What can Triarc’s managers/Mike learn from Quaker’s
experience? What can they apply from their own experience?
Mike can learn the following from Quaker’s experience:
That independence and sentiments of distributors should be considered.
That the size of the packaging should not be made so large at a shot.
That the change in the image of the Snapple brand from ‘fashion’ to ‘lifestyle’ should
not be done overnight.
The managers at Triarc’s/Mike can apply the following from their own experience:
That Snapple should maintain distinctness of its all flavours and make sure that any
given point of time; all of the flavours are available at the end retail points.
That the brand image has to be well defined and carried forward, not to be changed
along.
That the marketing strategies should be re-modified as per the local character.
Identify the highest priority initiatives on which Mike needs to focus on at Snapple.
To achieve the objective brand image, Snapple needs a value proposition that will resonate
with its target market. This should be the highest priority initiative on which Mike needs to
focus on at Snapple.
New product lines, new label design are some factors that can be considered under product
renovation.
It is advisable to maintain current pricing so as not to further alienate customer base.
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