Mktg 658 - Snapple Case Study
Essay by Melody Yang • November 18, 2018 • Case Study • 529 Words (3 Pages) • 742 Views
MKTG 658 Snapple Case Write-Up
Da (Melody) Yang
- Brief Background
In 1994, Quaker acquired Snapple at the height of its popularity for $1.7 billion. Quaker made a series of changes, disaffecting Snapple’s most loyal customers and tarnishing the brand’s image, resulting in declining revenue. In 1997, Triarc acquired Snapple for $300 million.
- Decision Dilemma
Mike Weinstein, CEO of Triarc Group, needed to decide on the marketing strategies that could revitalize Snapple Brand.
- Contradictions/Missing Information/Personal Insights
In 1997, Snapple’s revenue was over $400 million, but Quaker sold it at $300 million. Quaker’s chairman and president also resigned because of the fallout. Was the decline of Snapple’s sales caused by some management problem besides the improper marketing strategies?
- Decision Options
- Recover previous brand image
- Reposition Snapple as a mainstream brand
- Geographic expansion
- Decision Options Pro and Con
- Recover previous brand image: focus on product development to recover “quirky”, “innovative” image
Pros | Cons |
Maintain core competency, and the brand image was proved to be successful before | May be hard to recover broken image |
New products can stimulate bored loyal customers and attract new consumers | R&D of new products can be costly and time consuming |
Snapple can replace the underperforming flavors with successful new flavors to boost profits | R&D costs may squeeze the budget for marketing promotions |
- Reposition Snapple as a mainstream brand: compete with others by lower price and more promotion
Pros | Cons |
Mainstream is a larger market than “fashion”, which will enlarge customer base | Competition in mainstream market is getting more and more fierce |
The definition of “fashion” and “innovative” changes quickly and largely; mainstream is a safer choice | To lower price, Snapple needs to fix the problem of high distribution costs |
Money saved from developing new products can be spent on broader marketing methods | Snapple has to come up with new promotional strategies based on new positioning |
- Geographic expansion: expand the brand to regions with low brand recognition before
Pros | Cons |
Enlarge customer base and therefore increase sales volume | It’s hard to enter a new market with established competitions |
There is almost no rumor about Snapple’s previous fallout in undeveloped markets, so no trouble about fixing broken image | Compared to consumers in coastal cities, consumers in undeveloped markets may be less sensitive to the “quirky” and “fashion” brandings |
Enlarge distributors/retailers base, become a more nationalized brand | If Snapple has to apply different strategies or pricings due to different customer characteristics in different regions, brand image will be further diluted |
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