Hawaiian Punch Case Analysis
Introduction Cadbury Schweppes Americas Beverages is a an integrated business company of PLC-Dr Pepper/Seven Up, Inc; Snapple Beverage Group; and Mott’s. The integration of the three business units had a special significance for Hawaiian Punch. By 1999, Cadbury Schweppes/PLC acquired all rights to Hawaiian Punch from Proctor & Gamble. Since the acquisition, Dr Pepper/Seven Up, Inc., the third largest soft drink manufacturer in the United States, distributed the brand through its bottler network in the carbonated soft drink aisle or location of the supermarkets and other retail outlets. Hawaiian Punch was the only brand marketed by Cadbury Schweppes that employed two distinct and separate manufacturing, sales, and distribution
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In exhibit 6, you can find the 12-month income statement ending June 30, 2004. The finished goods COGS (cost of goods sold) represents seventy-eight percent of net dollars sales amongst finished goods and are eighty-two percent of total net sales volume. It also contributes fifty-six percent of gross contribution before marketing and fifty-nine percent after marketing. The costs of adding a new flavor or bottling size would be 2.8 million dollars, but do not require sales controlled marketing fees. Fifty-eight percent of Hawaiian Punch buyers shop the juice aisle (See Exhibit 7). We feel that introducing the new size in this aisle would benefit advertising the most. We chose to introduce the new 6.75-ounce light red flavor because this aisle is shopped more by households with children less than six to twelve years old age group. Also, the smaller sizes were popular for occasions away from home such as sporting events, etc…
The second part of our marketing strategy is adding a new flavor of mango to the product depth. This will satisfy the need for a new flavor innovation for both DSD and finished goods networks. The new flavor in the finished good network will focus on the Souht-East regions and be bottled in the common one gallon container. As mentioned before the cost of incurring the new size would be 2.8 million dollars for the shelf space and a local advertisement fee of $139,571 (ref. Exhibit 2, Avg.