Dr. Pepper Snapple Group, Inc.
1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007?
§ Five dominant competitors: Red Bull, Hansen Natural (Monster), Pepsi (Sobe Adrenaline Rush, AMP), Rockstar, and Coke (Tab, Full Throttle)
§ $6.2 billion industry in 2006
§ Grew at a rate of 42.5% from 2001 to 2006, 10.2% from 2007-2011
Consumers limit their choices to only 1.4 different brands indicating brand loyalty § Red Bull, Hansen, Pepsi, Rockstar, and Coke accounted for 94% of dollar sales and unit sales
§ Heaviest users are males ages 12 to 34; 43 million total US energy beverage users
§ 153 million cases of energy beverages were sold during …show more content…
6. What dollar amount for media advertising and promotion should be budged for a new energy beverage brand?
§ As the case mentioned, the top five competitors spent approximately $70 million measured advertising media. In DPSG’s case, it would probably be a good idea to invest $20 million for advertising and promotions. DPSG does not have the breadth and reach of Red Bull in regards to energy beverages and advertising but to break into the market and remain competitive with Red Bull, they may even need to invest more into their marketing strategies (ex. Social network sites, YouTube, sponsoring sporting events, taste testing at grocery stores, malls, and other events).
7. What suggested retail price should be recommended for a new beverage brand?
§ DPSG should sell their energy beverage at a retail price of $1.89 per single serve package. This would place their product below the $1.99 to $2.49 range for most popular energy drinks. In addition, the lower price may provide incentive for loyal customers to try something new.
8. What is a reasonable first-year sales forecast for a new energy beverage brand based on your recommended target market and marketing mix?
§ Based on the $6.2 billion in sales in 2006 and assuming the 10.2% growth