Dr. Pepper Case Analysis

2838 words 12 pages
I. Define the Problem Central Problem

Dr Pepper Snapple faced problems deciding whether the company should enter into the energy drink market. The energy drink market is a high growth and high-margin business. Recent rise in such functional drinks has Dr Pepper wanting to tap into this fast growing market. Dr. Pepper is one of the only major domestic carbonated soft drink companies that have not introduced a line of energy drinks. The challenge Dr Pepper Snapple faces is what would be the best way for it to market a new energy drink product. The company simply does not have the income to compete in advertising against Red Bull. Sub Problem Dr Pepper is indecisive about what market it wants to target. The energy drink
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The purchase of an energy drink can be categorized as a variety seeking buying behavior. In this case the consumer may do a lot of brand switching. The consumer will have low involvement but significant differences among brands similar to a customer purchasing cookies. The customer may try several different brands just because it is available. Changing brands doesn’t mean the consumer is dissatisfied but simply curious to try other brands. In categories such as this, marketers focus on changing variety behavior to habitual behavior by promoting lots of shelf space and increasing advertising.

Where/How is Product/Service Purchased? Distribution of the Dr Pepper Snapple beverage is huge. The product is purchased in the U. S., Canada, and Mexico. The Dr Pepper Snapple drink can be purchased at gas stations and large retailers such as: Wal-Mart, Target, and Saveway. Dr Pepper Snapple Group Inc, “has 21 manufacturing facilities and approximately 200 distribution centers in the United States as well as four manufacturing processes”(Kerin 82). Dr Pepper Snapple Group have warehouses located near bottling plants and are geographically dispersed across the region. The company transports its own products by using company owned delivery trucks as well as third-party logistics providers. The company is able to reduce distribution cost by having such broad distribution capacity.

Identify Channel(s) of Distribution The company

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