Snapple Case Study Analysis 5l652k

Brand Management

Case Analysis: Snapple

Faculty of Management Studies University of Central Punjab

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Case Analysis: Snapple Background Snapple was found in 1972 by three partners Hyman Golden, Arnold Greenberg and Leonard Marsh in Valley Stream, New York on Long Island. The word "Snapple" is derived from a carbonated apple juice and was introduced in the early of 1980s. The company introduced its product line of all-natural juices with the name Snapple name. Snapple's brand slogan is "Made from the best stuff on Earth”. At First they teamed up with California-based Juice Company but in due course broke away from. In the 1980‟s Snapple created the no-carbonated segment of ready-to-drink beverages like iced teas, fruit juices, diet juices, seltzers, isotonic sports drink and a Vitamin Supreme. By 1991 Snapple emerged as a nationally recognized brand. Consumers loved Snapple the name was catchy and they had a successful ad campaign, Wendy „the Snapple lady‟. Although all products not succeed but covered losses through pricing of successful products and result in annual turnover of $4 million in 1994.

1994-1997 Quaker Takes Command In 1994 the brand was acquired by the Quaker Oats company for $1.7billion. Quaker had amazing success with Gatorade and was keen to apply its proven approach to another beverage brand also. The major reasons why Quaker acquired Snapple were:   

They felt that the two products (Gatorade and Snapple) complemented each other and by acquiring Snapple at $1.7 billion will make Quaker a large beverage company. The decision which was inconsistent with the brand itself was that Quaker wanted to increase the distribution of Snapple in the warm channel but Gatorade performed well in that regard. They believed that it wouldn‟t be difficult to transform Snapple into a mainstream lifestyle product so they did not maintain Snapple‟s unique strategic position, expanded beverage portfolio

Quaker made a series of changes, disaffecting Snapple‟s most loyal customers and tarnishing brand image resulting decline in revenue. The decisions taken by Quaker were; Quaker sought to eliminate Snapple cost by shipping direct to supermarket warehouse and sees market strengths in the Northwest Coast. Quaker introduce Snapple in large size packing and retail display space in cold channels as a result Snapple best sold in 16 ounce single serving containers. Reasons why Snapple sale decreased and brand image weakened was mainly because of the “Big corporate sell” approach secondly the distributors of Snapple were not ready to exchange their supermarket s for trading Gatorade in the cold channels which also decreased the chances of Snapple in the cold channels and combining Snapple with Gatorade gave Snapple the image of a less utilitarian beverage, due to changes in packaging sizes that result in dilution of Snapple‟s positioning.

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1997 Triarc Acquires Snapple Snapple was acquired by Triarc in 1997. Triarc was a small beverage company. They acquired Snapple mainly to rebuild Snapple‟s brand equity and increase sales. Triarc efforts to reestablish brand value were:    

Casual approach towards product development. “What not to do to stop further fatal mistakes?” Risk orientation style, cost free and experimental To seek opportunities rather than risks

Problems     

After the acquisition by Quaker, Snapple experienced decrease in sales and weak brand image. Biggest mistake was that Quaker fired Wendy and also terminated contracts with Radio personalities such as Howard Stern and Rush Limbaugh, causing additional damage to Snapple‟s image. Quaker believed that the two products (Gatorade and Snapple) complemented each other. Quaker had only one beverage brand in the market and tried to sell Snapple the same way as Gatorade. Quaker larger distribution channels were not willing to adopt Snapple And also tried to sell Gatorade to small Snapple distributors.

Analysis The product itself has been marketed as 100% natural and proved to be quite popular. The attributes and personality of the product is its strength. It possesses a wide product line with many different flavors but only a few flavors have held the product afloat. The market segment has been difficult to define, Snapple is neither considered to be a lifestyle brand nor a fashion brand but saying that it is an alternative beverage category would be sufficient. The product was given pricing in the beginning of product development. As a result of pricing the product has been able to maintain itself regardless of many failing flavors. The most appealing attribute of the product‟s promotion was “100% natural”. Snapple used Wendy Kaufman, a real person living a real life, as their spokes model the wildfire began nationwide. She made appearances on David Letterman and Oprah, and Howard Stern and Rush Limbaugh became avid ers of the beverage brand. The brand was based in New York City which proved to be beneficial with regards to marketing, having great access to media and celebrities gave the brand exposure to national brand recognition. Quaker acquisition was impulsive; secondly it changed its advertising and marketing campaign and on the other hand failed to understand the Snapple‟s distribution system. We can also say that major reason behind Snapple‟s success was Wendy Kaufman as the face of Snapple. Wendy was the person that consumers related to, and Wendy single handedly maintained an image of the company as small and caring. When the acquisition was in place, Quaker fired Wendy and also terminated contracts with Radio 3

personalities such as Howard Stern and Rush Limbaugh, causing additional damage to Snapple‟s image. Without these three figures, Snapple began to lose appeal to customers. In this case; Mark Weinstein‟s company Triarc acquires Snapple, they are left with some majors decisions to make in order to rebuild brand equity and reestablish brand value.

Recommendations Triarc are now going to face a major challenge in building brand equity and reestablishing brand image and value. There are various options that Triarc can choose to adopt. Primarily Triarc should implement the suggestions made by Snapple‟s advertising agency, Deutsch Inc. The study carried out by Deutsch is aimed to revitalize brand. According to the study the reports attempt to focus on brand identity and indicate information about Snapple‟s target customers. Secondly Triarc must implement a marketing plan that embraces the unique characteristics that set it apart from the competition in the beverage industry. Finally Triarc must find new promotional avenues to reintroduce Snapple into popular culture, making it a fashionable brand. 

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Immediate action should be focused on the implementation of the suggestions from the cultural analysis report given in Deutsch‟s study. The report attempts to focus on brand identity and indicate information about Snapple‟s target customers. This report states that Snapple appeals to a very specific type of consumer falling between the typical soft-drink consumer and the health fanatic. Snapple is an all-natural, fun and unique beverage alternative and it can be referred to as the perfect choice when choosing a refreshing beverage at the end of a long day. Snapple must embrace its soothing taste and make its beverage a part of consumers‟ daily ritual. Consumers should be encouraged to take a moment to enjoy Snapple. Reintroducing the brand back into mainstream entertainment by finding new figures, radio shows and television programs to promote the product. The results from the study also suggested that most of the Snapple consumers still associate Snapple with Wendy Kaufman. Incase Wendy is not willing to reestablish this relationship then a similar personality could be considered as an association. Secondly it is unlikely to reestablish relationship with relations with Stern and Limbaugh because of the way the relationship was ended. However there are certainly other radio programs and TV shows that can help in promoting the brand. Lastly and most importantly must focus on taking an initiative to increase Snapple‟s warm channel availability. In order to do that Snapple must reestablish relations with distributors because Quaker has been able to undercut the distributors and forced them into a partnership with Gatorade. Snapple can take advantage of areas where sales have always been weak. Additionally should increase the availability of Snapple in the supermarkets. Increased sales in the supermarkets and other warm channels will make the product more abundant to consumers in greater varieties and will also allow them to buy the product in bulk packaging.

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Conclusion Snapple‟s popularity has been based on unconventional promotion methods unlike its competitors who are using conventional methods and techniques. Quaker overvalued Snapple and thought that the previous growth would continue. They were wrong to assume that Snapple would grow as Gatorade had been a successful brand. Quaker should have evaluated Snapple‟s growth prospects more realistically and used a more modest growth rate. To build brand equity and reestablish brand image and value, Triarc now needs to take vital steps to make Snapple a fashionable brand. We believe that in order to do so Triarc must adopt three options immediately, firstly focus on market segmentation, secondly must implement a marketing plan to reintroduce the brand back into mainstream entertainment and thirdly must take an initiative to strengthening the distribution system.

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