Introduction billion of which most of the sells

Introduction

The company, Dr. Pepper Snapple Group is in
the process of examining the option of launching into the energy drink industry
after uncovering the fact that in their beverage market they do not have any
energy drink in the market like other companies like coca cola. Dr Pepper
Snapple is currently one of the most reputable, well-developed and established
beverage firms in USA, Mexico, Europe and other parts of the world. According,
to the results of the total sales in 2007, Dr. Pepper Snapple has a net sales
of nearly $6 billion of which most of the sells were done in the USA and around
4% was made in Canada.

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In other to consider the possibility of Dr Pepper
Snapple entering into the energy drink industry, the company has to spend enough
time to evaluate where this idea will be beneficiary and profitable to the
company. In other to consider this, the stakeholders and board members would
need to determine various elements and factors such as what demographics would
the company like to target their energy drink to? They would have to decide
whether their target audience will be a certain demographics in terms of large
volume or will they start on a smaller target. They have to also consider the
location, they would like to launch their product, the USA, Europe, or Mexico?
They could try to decide to target various locations at the same time. They
should consider the avenue in which the product would be sold, is it going to
be in small retail stores, convenient stores or mass merchandiser like Walmart?
And also, they would also have to consider what price they would like to sell
their product, based on the current price of energy drink which is
approximately $2 per drink, do they want to work with that price or come a
little lower in other to break into the market? The executive will have to
think about these various factors and more into other to determine whether this
is good for them or not.

According
to the SWOT analysis shown below, the company has a couple of strengths including
having a strong organic growth been in the 3rd place in CSD Market or
in the beverage industry just behind Pepsi and coca cola. The year over year growth
has been 3.5% and in the 3rd quarter in 2016 the growth rate
increases by 1%. This growth has been compared to its competitors or counterparts
that have recorded some zero and others negative. Basically, when Dr. Pepper
Snapple Group is compared to top line companies in the same industries, they
have outpaced that of both of their competitors Pepsi and Coca-Cola. Secondly, Dr.
Pepper Snapple Group has almost 23 manufacturing centers and almost over 110
distribution centers and over 19,800 employees in North-America.

 

Pros

Cons

 

Strengths

Weaknesses

Internal

·        
Strong position
and growth in the industry
·        
Broad
Geographic Manufacturing and Distribution Coverage
·        
Strong
Operating Margins and Significant, Stable Cash Flow
·        
Attractive
Positioning Within a Large Growing and Profitable Market
·        
Experience
Executive Management Team
·        
Integrated
Business Model

·        
Limited
share in most of the brands makes it difficult for the parent company to make
ultimate decisions
·        
Strong
competition from the presence of globally established brands
·        
Compete
with national brands

 

Opportunities

Threats

Externals

·        
Newer
markets to tap
·        
Expansion
of business and diversifying in new categories
·        
 Acquisition
of other brands to enhance market position
·        
Expand
market presence

·        
Use of
alternative materials
·        
Government
regulations
·        
FDA
Regulations
·        
Competitive
pricing of the competitors are lowering the profit margins
·        
Absence
of brands from the retails shelf’s due to poor distribution networks

 

Alternatives

There
are some possible alternatives for Dr. Pepper Snapple Group which can allow
them to use as access into the energy drink industry.

1.      First,
they could look for an already existing and established energy drink and
acquire it.

2.      Second
option would be to create a new brand from the scratch

3.      They
can also align themselves with other companies and distributive or circulate
their products.

Analysis
of Entering the Energy Drink Market

After
examining other competitors, one very obvious attribute that Dr. Pepper Snapple
Group need to have to be successful is to develop and have a great distribution
system which they already have. As of date they almost 23manufacturing sites
and over 110 distribution centers. This will give Dr. Pepper Snapple Group an advantageous
edge over other competitors and allow them break into the industry.

Gender

% Users

Fem Adults

10%

Male Adults

17%

Fem Teens

27%

Male Teens

34%

Female Total

19%

Male Total

26%

 

When
analyzing the appropriate target market, this will be between males within the
ages of 12 – 34 that account for nearly 70% of those who buy the product, but Dr.
Pepper Snapple Group can also aim for other populations and market their
product to them as well. For instance female customers are only 10% below that
of male customers, which makes it a very important target to acquire. Also, Dr.
Pepper Snapple Group has to consider targeting the healthy lifestyle audience
in the population. If they can consider creating a new healthy energy drink
which contains low calories and also healthy minerals, this will entice the
healthy population.

There
are various business strategies that Dr. Pepper Snapple Group already have, for
instance the beverage industry is focused on high margin opportunities and
high. Also, Dr. Pepper Snapple has a high margin mediums like vending machines,
retail sales, supermarkets and convenient stores. As mentioned earlier, the
company can make more profit by focusing on more on the female demographics,
and creating new products that line with the new healthy lifestyle movement.

Problems

The
difficulty Dr. Pepper Snapple Group could face would be in building a strong
customer relationships, and adding to their target market. In terms of building
a strong customer service, the company could make use of their already working
operations and supply chain system to reach directly to the customer and
thereby eliminating the middle man. This will also, help them fix issues that
arise and this will please their customers. Also, Dr. Pepper Snapple Group
already has a loyal group if customers and a constant place at stores to
compete with other competitors.

Conclusion

Product and Market: Dr.
Pepper Snapple Group has the opportunity to increase its market value and
shares and become the leading energy brand in the industry. To be able to achieve
this, Dr. Pepper Snapple Group needs to start by creating a healthier energy
like introducing lower calorie drinks and also infuse minerals into the energy
drink.

Pricing: Dr.
Pepper Snapple Group has come up with an affordable price that will allow them
to be competitive in the current market. The company has to consider not
choosing high prices because they are new to the industry and are trying to
break into the industry.

Production: Dr.
Pepper Snapple Group should also use its supply chain system to provide drinks
to most convenient stores, since most of the target audience will always go the
convenient stores and also use vending machines at gas stations.

Promotion: Dr.
Pepper Snapple Group, since this appeals to a growing population in the country
and the world. The company should think about promotion, giveaways at sporting
events and also give at a discount price to loyal customers who already trust
the brand and it products.

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