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Dr Pepper Case Study

Essay by   •  December 1, 2017  •  Case Study  •  903 Words (4 Pages)  •  683 Views

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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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