Executive Summary During 1987 – 1993, Snapple was one of the successful brands of a variety of non-carbonated beverages that targeted mainly towards the young, health conscious consumers. Snapple provided many varieties of flavour to its consumers and placed them in different market segments which were mainly cold channel distributions. With a premium pricing strategy, it had price as an indicator of quality and was consistent with its positioning strategy. The success of its marketing strategies were able to enhance consumers brand awareness, brand recognition and brand recall.
Subsequently, Snapple was sold to Quaker Oat in 1994 for $1. 7 billion, the sale was in decline. Quaker made mismanagement in financial, marketing strategies. Accompanied with ineffective advertising and marketing programs, lost in trust in distributors and increase in competition in the market, were among the reasons for the brand’s decline. In 1997, Quaker decided to sell the Snapple to Triarc for $300 million. Snapple MPD † 545: Snapple Revitalization Plan Problem Statement – Changes need to be immediately implemented to stop the declining revenue trend of Snapple.
Revenues declined from $674M in 1994 to $440 M in 1997; the sales plummeted by 34. 7% Snapple was best known for its line of iced teas and juices in off-beat flavors but recent surveys show that Snapple brand means different thing to different people. So the immediate goal is to position the brand and return to sustainable growth. Also one of the biggest priorities is to repair the distributor relationship which was distressed because of prior owners. SWOT Analysis Strengths |Weaknesses | |Cold Channel network / Distributors |Positioning of Snapple brand | |Triarc’s Corporate style |Limited penetration in Supermarket | |Triarc’s acquisition expertise [pic] Product and Brand Management:325-307 3. The Fall of Snapple – 1993 to 1997
SWOT Analysis SWOT analysis is used to evaluate the failure of Snapple and Quaker’s management performance. The aim of SWOT analysis is to identify the key internal and external factors in the market environment in achieving the underlying business objectives and goals. 3. 1 Internal Factors: Strength is the competitive advantages and attributes which helps to differentiate companies from competitors, in meeting the target market demand. Quaker is experienced in managing its products and also building strong brand images.
Since it had the resources and management skills, it was foreseen to be able to benefit Snapple brand. Moreover, the wide range of flavours tends to reinforce Snapple’s individualism characteristic, which was a clear point of difference. Snapple also possessed a strong heritage of providing authentic, natural juices. However, past performance offers no guarantee of future success and even well-established brands need to work to sustain their position. Weakness relates to the limitation and restraint in decision making to achieve the objectives.
Gatorade and Snapple had different brand images: lifestyle and fashion, respectively, which created confusion to the consumers as the brand portfolio was not properly managed. Brand values and meaning are related to consumers’ perception of belonging and loyalty of the brand (Quester, 2006). Yet, Snapple had difficulty in differentiating its product from “fashion water”. It lacked compelling reason for use. Mainly due to the discontinuance of Wendy and Stern, brand loyalty was lost which impacted Snapple’s financial performance (Leiser, 2004).
The failure of large pack of Snapple drinks illustrated Quaker’s low understanding and lack of consumers’ and distributors’ communication. Moreover, the failure of distributing a wide range of flavours affected consumers’ repurchasing behaviour (Andreu, 2006). The main weakness of Quaker was the failure of Snapple’s brand consistency and the transformation of its brand. The lack of understanding of brand also led to wrong implementation of marketing tactics 3. 2 External factors: Opportunity is the supportive marketing environments which assist organizations in achieving their objectives.
Snapple’s early entry to health conscious beverage market involved little competition which helped to establish its well-known brand. Consumers’ buying decision involves recognition of problems or product needs, subsequently searching for product information, valuation of alternatives, purchase and then post purchase evaluation (Pride, 2006). In the information search process, the external factor of decision is affected by friends or outside resources (Pride, 2006). Being perceived as “fashion water”, Snapple’s youth market is seen to be more easily influenced by peers.
Furthermore, as Snapple had a strong heritage of providing natural, authentic juices, it had well established its brand image and also gained a group of loyal customers, which would pave a path to maintain and develop future growth of Snapple. Threat is the barrier that prevents organizations in achieving their objectives. Snapple’s rumors had an impact on brand image, consumers’ brand loyalty and brand equity. The quality, design, features, cost and prices are the considerations for consumers purchasing decisions. Price of a product is based on the consumers’ perception of the value (Leiser, 2004).
Due to the success of Snapple, increase in competition was seen and consumers became more price conscious. Consumers will switch for the lower price product when there is no large differentiation between the products (Thavaraj, 1976). The youth market, with a lower disposable income, may thus be lost. Furthermore, Snapple should aim to deliver to the ever-changing market’s demand, as “experience” will be a key word for the beverages brand architecture and the consumer-focused development in the future market place (Ellia, 2006).
In conclusion, the failure of Snapple lies both within the brand and the bad management by Quaker [pic] Product and Brand Management:325-307 5. Recom m endat ions Triarc needs to understand the product differentiation of its new product, Snapple, from its competitors and employ strategies to heavily market the brand values of Snapple without being stuck in its past era. To elaborate, innovation is required for Triarc to sustain with the increasing and changing consumer demands without detracting from its core product business and ensure that consumers are well informed about its product.
Regardless of the types of innovations employed, the marketing strategy should always focus on its core brand value so that consumers will be able to recognize any product or campaign as a Snapple product. This ensures Snapple in properly balancing consistency and change with the brand. Building brand equity requires firms to recognize and understand the needs of their consumers. In addition, Triarc has to be able to foresee and adapt to the ever-changing consumer’s needs.
Both qualitative and quantitative researches should be engaged, in order to gain an in-dept understanding of consumers’ behaviour. Brand tracking to establish consumers’ understanding of Snapple, their responses to competitor beverages, to establish consumers’ wants and needs and to establish Snapple’s key demographic and target market, as well as cost benefit analysis because it would be helpful if they could reasonably estimate the probable benefits to determine whatever they are worth to cost involved (Hartley 1998).
Quantitative research that measures brand awareness and brand image should be collaborated as they tend to be complimentary. However, the down-side of utilizing both researches is that it involves significant amount of time and money. Extension of distribution channels to reach to vast consumers is recommended, since most of the sales are generated through cold channels. This would thus result in raising brand awareness. Vending into overseas market should be considered, when Snapple’s brand image has been reinstated.
Hence, building a strong connection and relationship with distributors is vital to organizations especially for those that require indirect distribution channels. Fostering a strong and loyal community within the organization would ultimately enhance own brand equity. This can be done through building a strong welfare, which would help employees to have a sense of belonging to the organization that would assist Snapple in earning tremendous internal and operational loyalty.
Though indirect distribution channel is employed, Triarc should always seek for means to interact with its consumers, through organizing events and sponsorship. Providing more information about Snapple product to consumers on its website is also recommended, in order to increase Snapple’s brand awareness and brand image. Another recommendation to Triarc should be to reinstate Wendy and Stern due to their association being established with Snapple. This would then assist Snapple in transforming the negative association it possessed in the 1990’s and also reinstate Snapple’s brand image.
Although various recommendations are available for Triarc, the organization should always beware of the advantages and disadvantages of each marketing strategy employed and are able to transform the negative associations into positive associations, in order to enhance the firm’s overall value. [pic] Product and Brand Management:325-307 6. Conclusion SWOT analysis is evaluated and it identified the key internal (strength and weakness) and external factors (opportunity and threat) of Snapple’s and Quaker’s failure in market environment.
Snapple and Quaker have competitive advantages to be differentiated from competitors in achieving success. However, the weakness of Snapple and Quaker’s different brand images affected its brand consistency. Opportunities were available in the market for Snapple’s growth in market share and also stabilisation of its brand image in consumer buying decision process. Price is one of the barriers for Snapple due to the increase competitions and price conscious consumers.
After SWOT is being analysed, it identified that there is a need for reassessing and improvement in their marketing strategies in order to be success. To be able to manage Snapple, Triarc is required to understand the product differentiation of Snapple from its own product and its competitors and employ strategies to heavily market the brand values of Snapple. The marketing strategy should always focus on its core brand value. Both qualitative and quantitative consumer researches, and brand tracking should be engaged to enhance the understanding of their product and consumers’ requirements.
Extension of distribution channels, building a strong connection and relationship with distributors, vending into overseas market, fostering a strong and loyal community within the organization, reinstating Wendy and Stern are recommended. However, Triarc should always beware of the advantages and disadvantages of each marketing strategy employed and to be able to transform the negative associations into positive associations, in order to enhance the firm’s overall value. Swot analysis of snapple
