Snapple-Case Study PDF

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LEARNINGS FROM SNAPPLE CASESTUDY Sindhoora Sambaraju NMIMS – Executive MBA Batch – 18

Snapple’s Journey: 1972 – Snapple was founded by Leonard Marsh, Hyman Golden, and Arnold Greenberg in New York. 1990 – Snapple emerged as a nationally recognized brand in the beverage industry. 1994 – Quaker purchased Snapple for $1.7 billion. 1997 – Quaker sells Snapple to Triarc group at $300 million, a loss of $1.4 billion over 4 years. 2000 – Triarc group sells Snapple to Cadbury Schweppes for $1.45 billion, a profit of $1.25 billion over 3 years.

Arnie Greenberg, Leonard Marsh and Hyman Golden went into business selling all-natural apple juice to health food stores in Greenwich Village, in 1972. Business grew using internally generated funds. It built a strong network of distributors across New York City. Expansion of distribution lead to a turnover of $4 million in 1984 and $8 million in 1986. Snapple managed to rope in tennis star Wendy for several ads, even though it was an idea which eventually faded away.

Unique Selling Point:    

An authentic drink, i.e., it was a pure drink. It was fruity, and hence healthy. Was a fashion-sensitive and quirky brand compared to other drinks in the market. It was not a drink for the ones who are really serious about their health. The packaging of Snapple plays out the taste experience.

Strategies of Snapple, Quaker Strategy of Carl Gilman   

Seeking suggestions from focus groups on improvement of label design. Spending more on advertising and effective utilization of media for brand promotion. Intensifying independent distribution throughout East Coast which included hiring Ted landers for distribution in Boston.

Result: 

Snapple witnessed its highest sales from 1987 to 1994 because of these marketing strategies

Strategy of Quaker     

Following huge success with Gatorade, they tried to repeat similar marketing strategies with Snapple. Tried to market Gatorade and Snapple complementarily, with simultaneous movement of Gatorade in the Mom & Pop stores & Snapple in Supermarkets. Cut down costs on advertising and severed media relations. Introduce Snapple in the larger container sizes. Termination of contracts with Wendy & Howards Stern

Result     

Decline in Sales. Distributors did not agree to cede rights to Snapple’s supermarket accounts. Snapple failed to make bigger presence in the supermarkets and remained confirmed to cold channels. Termination of contracts with Howard Stern & Wendy Kaufman led to growing unpopularity amongst general consumers and even provoked negative publicity from Stern. Attempt to complement marketing schemes between Gatorade and Snapple hand-in-hand resulted in unnecessary competition between these two brands, wherein Gatorade emerged to be the preferred beverage.

Major Issues Faced by Snapple:     

The takeover by Quaker was a managerial disaster due to misalignment between Snapple and Quaker’s corporate culture. This caused losses to the tune of $1.4 billion in a span of 4 years. It also suffered due to slow growth of Quaker themselves. Snapple also had to deal with stiff competition from new entrants. Hence, reducing the market share. Suffered due to some poor decisions, which included the firing of popular Snapple spokesmodel Wendy Kaufman. They also shattered ties with radio personalities Howard Stern and Rush Limbaugh. Quaker tried to incorporate the successful methods of Gatorade to Snapple, which backfired, by changing its distribution, packaging and other important relationships.

What should Triarc do?    

Reviving the brand and remaining true to the brand’s culture. Rehire Wendy Kaufman as the spokesmodel of Snapple. Should take a different approach, recognizing that Snapple meant different things to different people. Should return to the old style and tone of advertisements in a new way, as well as reverting to the old style of packaging. Should go back the old Snapple distribution systems, which would be mutually beneficial to Snapple as well as its partners.

Lessons Learned through this CASE      

Providing Wide Product Line will not always be a successful bet. Choose brand ambassador wisely to portray strong brand image. Innovative marketing strategy is beneficial for promoting brand image. Targeting market on the basis of Geographical factor. There should be a good advertising line. Proper utilization of distribution channels in order to reach maximum availability points....