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Information about CADBURY

Published on February 24, 2008

Author: Noormahl


INTRODUCTION:  INTRODUCTION Cadbury Beverage the beverage division of Cadbury Schweppes PLC. Cadbury Schweppes PLC, in 1989, had $4.6 billion of worldwide sales. The company is the world’first soft drink maker and the 3rd largest soft drink marketer. Beverage accounted for 60% of company worldwide sales and confectionery for 40%. Cadbury Beverage Inc. Is the 4th largest soft drink marketer in the US, with a market share of 3.4%. ISSUE:  ISSUE There are 3 issues to relaunch the Crush brand on the soft drink market : To developp a base positioning To build a cooperative relationship with bottlers To budget advertising and promotion program INDUSTRY STRUCTURE:  INDUSTRY STRUCTURE 3 major actors in the production and distribution of carbonated soft drinks : Concentrate producers : -over 40 in the US - manufacture the basic flavor - Dominated by Coca-Cola, PepsiCo and Dr Pepper with 82 % of sales Bottlers : - convert basic flavor in carbonated soft drink - package the beverage in bottles and cans - sell the brands of concentrate producers - franchised bottlers : package and distribute in a defined territory, represent noncompetitive brands Retail channel : - supermarket, convenience store, vending machines, fountain service and small retail outlets - supermarket account for about 40% of sales INDUSTRY ECONOMICS:  INDUSTRY ECONOMICS Concentrate producers: - gross profit of 86% (regular) to 87% (diet) - pretax cash profit of 16% (regular) to 30% (diet) Bottlers: - gross profit of 43% (diet) to 46% (regular) - pretax cash profit of 12% (diet) to 15% (regular) Conclusion: manufacturing diet drinks is more profitable for concentrate producers and the opposite is true for bottlers. That is why Cadbury should maximize its diet drinks market share. BUYER BEHAVIOR:  BUYER BEHAVIOR Users : - US consumers drink more soft drinks than tap water - unplanned purchase in supermarkets - sensitive to price promotions, in-store displays and all point- of- sales promotions Geographically : - The national consumption per capita is 46.7 gallons - per capita consumption in the East South Central states is the highest with 54.9 gallons - per capita consumption in the Mountains states is the lowest with 37.1 gallons Season : - higher consumption and purchase during summer BRANDS & PRODUCTS:  BRANDS & PRODUCTS Brands : - More than 900 registered brand name in the US. - The top 10 brands are marketed by the 3 leading US soft drinks companies : Coca-Cola, PepsiCo and Dr.Pepper/7up Products : - The cola flavor is the most spending soft drink carbonated in the US with 65.7% of market share - Orange flavor arrive at the 3rd position with just 3.9% of market share 2 segments : - the regular carbonated soft drink - the diet carbonated soft drink MARKET SHARE & MARKET COVERAGE:  MARKET SHARE & MARKET COVERAGE MARKET SHARE & ADVERTISING SHARE:  MARKET SHARE & ADVERTISING SHARE BRAND POSITIONING MAP:  BRAND POSITIONING MAP Crush Mandarin Orange Minute maid Sunkist GRAPHICS CONCLUSIONS:  GRAPHICS CONCLUSIONS When the market coverage increases, the market share increases too. Market share and advertising : Coca Cola & PepsiCo spend a lot even if they win a small market share. We reposition Crush on the family with children market. SWOT ANALYSIS:  SWOT ANALYSIS FORCES 4th largest marketer in the US High name Long life brand High awareness in big cities Know-how WEAKNESSES Low market share Low market coverage Limited bottlers network Relative low ad & promotion expenditures Risky positioning : canibalization with Sunkist SWOT ANALYSIS:  SWOT ANALYSIS KSF : - Clear positioning - Market coverage - Advertising & promotion program ORANGE CRUSH POSITIONING:  ORANGE CRUSH POSITIONING Three approaches can be considered to position the Crush brand : Attibutes : -Natural & competitive taste since 1954 - Bright color - Regular & diet Uses : - Orange Crush drinking for fun :during parties & week-end - Orange is better for health than colas : lots of vitamins Users : - Orange can be drink by adults, teens and children - We avoid canibalization with Sunkist - We target family with children So we recommend to position orange Crush to the family with children at home on the regular segment, on the other hand the Crush diet drink positioning should be aimed at young people in big cities. CRUSH ADVERTISING & PROMOTION PROGRAM:  CRUSH ADVERTISING & PROMOTION PROGRAM Objectives : - Build a cooperative relationship with bottlers - Increase our market share - Relaunch the Crush brand name Strategies : - Recruit new bottlers : setting the push stratregy - Attract new customers : setting the pull strategy - Increase merchandising & sponsoring - Enlarge medias network - Coupons both for regular & diet drinks MEDIA ADVERTISING:  MEDIA ADVERTISING CRUSH ADVERTISING BUDGET:  CRUSH ADVERTISING BUDGET Budget : - General : $11,970,000 - Diet : $4,189,500 - Regular : $7,780,500 So we allocate $0.38 per case. Allocation : - $0.18 for « dealer loader » ( premium given to retailers) - $0.20 for promotion that we divides as follow : $0.1 for displays & outdoor, $0.05 for TV spots and 0.05 for magazines PRO FORMA INCOME STATEMENT:  PRO FORMA INCOME STATEMENT Crush brand with 10% market share : 315,000,000 x 0.1 = 31,500,000 CONCLUSION:  CONCLUSION We avoid competition with Coca-Cola & Pepsi : no frontal attack to make sure Cadbury is a niche marketer. We avoid canibalization with Sunkist in positioning the Crush brand name on the family with children at home segment. We increase advertising & promotion expenditures to increase our market share.

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