Dr Pepper Case Study
Essay by raquelgalindo • December 1, 2017 • Case Study • 903 Words (4 Pages) • 1,018 Views
Internal Factors | Strengths | Weakness |
Management | Experienced | New to the company |
Offering | Trendy beverage | Many other options the market already |
Marketing | US market mainly | No research in consumers outside of USA. No serving all areas of the United States |
Personnel | Currently producing beverages | Will require training |
Finance | There is a product demand | Other 5 companies leading the market for this product |
Manufacturing | Currently having manufacturing and distribution facilities | Lack of information in regards of volume of sales |
R$D | Well known already for product quality | Need to do more product research to warranty that the new product meets the company standards and what customers are expecting to buy. |
External Factors | Opportunities | Threats |
Consumer/Social | Hispanic (27 % users) 4.48 servings/months. African American, 21%, followed by Caucasian, 12% of the users. Male 35-44 years old. New life style requires energy boost in order to accomplish work/family/school demands. | Deaths related to high intake of caffeine. Sugar can affect obesity rate of population. |
Competitive | Distinctive name and market reputation. | Already popular energetic drinks in the market. Other caffeinated drinks are getting popular such as Starbucks coffees |
Technological | Already having the technological resources to make the product | Lead markets already gained economies in packaging |
Economic | Increasing demand | No all the segments of population can afford energy drinks in a daily basis |
Legal/regulatory | Products regulated by USA FDA | Washington State begins a law that prohibits selling energy drinks to minors |
The new manager of Dr. Pepper Snapple Group, Andrew Barker, is considering launching a new beverage product, the energy drink. The first energy drink was created by a Japanese pharmaceutical company in 1960 but it was not until 1997 that the first energy drink was introduced in United States, Red Bull. Monster energy drink by Hansen followed Red bull in 2002. During 2005-2006 a new market for energetic drinks was created. As a leader, Barker is trying to determine if there is a profitable opportunity for growth in this area.
Dr. Pepper Snapple Group, an established beverage company, reported net sales of $5.7 in 2007. Dr. Pepper products are sold in United States (89% of the total sale), Mexico, Canada and the Caribbean. Dr. Pepper products are mainly flavored carbonated soft drinks but it also includes teas, carbonated mineral water, bottled water, and vegetable juices. All this data indicates that Dr. Pepper Snapple group knows how successfully produce a drink. This group should take into consideration the new demand of energy drinks. As a leader of this company, Dr. Pepper should address customer needs. Adding a new product line will increase market opportunities, it will diversify risk, and it will capitalize the existing reputation. Furthermore, there is an opportunity for profit by increasing the number of sales, keeping the existing customers and capturing new ones and to be more competent in the beverage industry. Since Dr. Pepper already has the infrastructure to manufacture a drink and to deliver it to the customer, adding a new product to their list should be an easy and affordable market strategy. On the other hand, introducing a new product can cannibalize sales of an already existing product. Barker also needs to take into consideration that the market is already saturated with energy drinks and they are already five brand names dominating this market.
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