Snapple Case Study Analysis

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Brand Management

Case Analysis: Snapple

Faculty of Management Studies

University of Central Punjab

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Case Analysis: Snapple

Background

Snapple was found

Snapple was found in 1972 by three partners Hyin 1972 by three partners Hyman Golden, Arnold Greenberg man Golden, Arnold Greenberg and Leonard Marsh inand Leonard Marsh in Valley Stream, New York on

Valley Stream, New York on Long Island. The word "Snapple" is derived fLong Island. The word "Snapple" is derived from a carbonated apple juicerom a carbonated apple juice and was introduced in the early

and was introduced in the early of 1980s. The company introduced its product line of of 1980s. The company introduced its product line of all-natural juicesall-natural juices with the name Snapple name.

with the name Snapple name. Snapple's brand slogan is "MadSnapple's brand slogan is "Made from the best stuff on Earth”. At First theye from the best stuff on Earth”. At First they teamed up with California-based Juice Company but in due

teamed up with California-based Juice Company but in due course broke away from.course broke away from. In the 1980‟sIn the 1980‟s Snapple created the no-carbonated segment of

Snapple created the no-carbonated segment of ready-to-drink beveragready-to-drink beverages like iced es like iced teas, fruit juices, dietteas, fruit juices, diet juices, seltzers, isotonic

juices, seltzers, isotonic sports drink and a Vitamsports drink and a Vitamin Supreme. By 1991 Snapple emerged as a nationin Supreme. By 1991 Snapple emerged as a nationallyally recognized brand. Consumers loved Snapple the name was

recognized brand. Consumers loved Snapple the name was catchy and they had a catchy and they had a successful ad campaign,successful ad campaign, Wendy „the Snapple lady‟.

Wendy „the Snapple lady‟. Although all products not succeed but covered losses through premium pricing Although all products not succeed but covered losses through premium pricing of successful products and result in annual turnover of $4

of successful products and result in annual turnover of $4 million in 1994.million in 1994.

1994-1997 Quaker Takes Command

In 1994 the brand was

In 1994 the brand was acquired by the Quaker Oats company for acquired by the Quaker Oats company for $1.7billion. Quaker had amazing success$1.7billion. Quaker had amazing success with Gatorade and was keen to

with Gatorade and was keen to apply its proven approach to another beverage brand also. apply its proven approach to another beverage brand also. The majorThe major reasons why Quaker acquired Snapple were:

reasons why Quaker acquired Snapple were:

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 They felt that the two products (Gatorade and They felt that the two products (Gatorade and Snapple) complemented each other and bySnapple) complemented each other and by

acquiring Snapple at $1.7 billion will make Quaker a

acquiring Snapple at $1.7 billion will make Quaker a large beverage company.large beverage company.

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 The decision which was inconsistent with the brand itself was that Quaker The decision which was inconsistent with the brand itself was that Quaker wanted to increase thewanted to increase the

distribution of Snapple in the warm channel but Gatorade performed well

distribution of Snapple in the warm channel but Gatorade performed well in that regard.in that regard.

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 They believed that it wouldn‟t be difficult to transform Snapple into a mainstream lifestyleThey believed that it wouldn‟t be difficult to transform Snapple into a mainstream lifestyle

product so

product so they did nothey did not maintain t maintain Snapple‟s Snapple‟s unique sunique strategic ptrategic position, exosition, expanded bevpanded bever er age portfolioage portfolio Quaker made a series of changes, disaffecting Snapple‟s most loyal customers and tarnishing brand image Quaker made a series of changes, disaffecting Snapple‟s most loyal customers and tarnishing brand image resulting decline in revenue. The decisions taken by Quaker were;

resulting decline in revenue. The decisions taken by Quaker were; Quaker sought to eliminate SnappleQuaker sought to eliminate Snapple cost by shipping direct to supermarket warehouse and sees

cost by shipping direct to supermarket warehouse and sees market strengths in the Northwest Coast.market strengths in the Northwest Coast. Quaker introduce Snapple in large size packing and

Quaker introduce Snapple in large size packing and retail display space in cold channels as a retail display space in cold channels as a resultresult Snapple best sold in 16 ounce

Snapple best sold in 16 ounce single serving containers.single serving containers. Reasons why Snapple sale decreased

Reasons why Snapple sale decreased and brand image weakened was mainly because of the “Bigand brand image weakened was mainly because of the “Big corporate sell” approach secondly the distributors of Snapple were not ready to exchange their corporate sell” approach secondly the distributors of Snapple were not ready to exchange their supermarket accounts for trading Gatorade in the cold channels which also

supermarket accounts for trading Gatorade in the cold channels which also decreased the chances ofdecreased the chances of Snapple in the cold channels and

Snapple in the cold channels and combining Snapple with Gatorade gave Snapple the image of a combining Snapple with Gatorade gave Snapple the image of a lessless utilitarian beverage, due to changes in packaging sizes that result in dilution of Snapple‟s

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1997 Triarc Acquires Snapple

Snapple was acquired by Triarc in

Snapple was acquired by Triarc in 1997. Triarc was a 1997. Triarc was a small beverage company. They acquired Snapplesmall beverage company. They acquired Snapple mainly to rebuild Snapple‟s brand equity and increase sales. Triarc efforts to reestablish brand value were: mainly to rebuild Snapple‟s brand equity and increase sales. Triarc efforts to reestablish brand value were:

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 Casual approach towards product development.Casual approach towards product development. 

 “What not to do to stop further fatal mistakes?”“What not to do to stop further fatal mistakes?” 

 Risk orientation style, cost free and experimentalRisk orientation style, cost free and experimental 

 To seek opportunities rather than To seek opportunities rather than risksrisks

Problems

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 After the acquisition by Quaker, Snapple experienced decrease in sales After the acquisition by Quaker, Snapple experienced decrease in sales and weak brand image.and weak brand image. 

 Biggest mistake was thatBiggest mistake was thatQuaker fired Wendy and also terminated contracts with Radio Quaker fired Wendy and also terminated contracts with Radio personalitiespersonalities

such as Howard

such as Howard Stern and Rush Limbaugh, causing additional damage to Snapple‟s image.Stern and Rush Limbaugh, causing additional damage to Snapple‟s image.

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 Quaker believed that the two products (Gatorade and Snapple) complemented each other. Quaker believed that the two products (Gatorade and Snapple) complemented each other. QuakerQuaker

had only one beverage brand in the market and tried to sell Snapple the same way as Gatorade. had only one beverage brand in the market and tried to sell Snapple the same way as Gatorade.

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 Quaker larger distribution channels were not willing to adopt SnappleQuaker larger distribution channels were not willing to adopt Snapple 

 And also tried to sell Gatorade to small And also tried to sell Gatorade to small Snapple distributorsSnapple distributors..

Analysis

The product itself has been marketed a

The product itself has been marketed as 100% natural and proved to be s 100% natural and proved to be quite popular. The attributes andquite popular. The attributes and personality of the prod

personality of the product is its strength. Iuct is its strength. It possesses a wide product t possesses a wide product line with many different flavline with many different flavors butors but only a few flavors have

only a few flavors have held the product afloat. The market segment has held the product afloat. The market segment has been difficult to define, Snapplebeen difficult to define, Snapple is neither considered to be a

is neither considered to be a lifestyle brand nor a fashion brand lifestyle brand nor a fashion brand but saying that it is an alternativebut saying that it is an alternative beverage category would b

beverage category would be sufficient.e sufficient.

The product was given premium pricing in the

The product was given premium pricing in the beginning of product development. As a result of beginning of product development. As a result of premiumpremium pricing the product has b

pricing the product has been able to maintain itself regeen able to maintain itself regardless of many failing flavardless of many failing flavors. The most appealingors. The most appealing attribute of the product‟s promotion was “100% natural”. Snapple used Wendy Kaufman, a real person attribute of the product‟s promotion was “100% natural”. Snapple used Wendy Kaufman, a real person living a real life, as

living a real life, as their spokes model the wildfire began nationwide. She made appearances on their spokes model the wildfire began nationwide. She made appearances on DavidDavid Letterman and Oprah, and Howard Stern

Letterman and Oprah, and Howard Stern and Rush Limbaugh became avid supporters of the and Rush Limbaugh became avid supporters of the beveragebeverage brand. The brand was based in New Y

brand. The brand was based in New York City which provork City which proved to be beneficial with regards to marked to be beneficial with regards to marketing,eting, having great access to media and

having great access to media and celebrities gave the brand exposure to national brand recognition.celebrities gave the brand exposure to national brand recognition.

Quaker acquisition was impulsive; secondly it changed its advertising and marketing campaign and on the Quaker acquisition was impulsive; secondly it changed its advertising and marketing campaign and on the other hand failed to understand

other hand failed to understand the Snapple‟s distribution system.the Snapple‟s distribution system. We can also say that major reason We can also say that major reason behind Snap

behind Snapple‟s succple‟s success was Wess was Wendy Kaufmendy Kaufman as the an as the face of Snface of Snapple. Wapple. Wendy waendy was the person s the person thatthat consumers related to, and Wendy single handedly maintained an image of

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personalities such as Ho

personalities such as Howardward Stern and Rush Limbaugh, causing additional damage to Snapple‟s image.Stern and Rush Limbaugh, causing additional damage to Snapple‟s image. Without these three figures, Snapple began to lose

Without these three figures, Snapple began to lose appeal to customers.appeal to customers.

In this case; Mark Weinstein‟s company Triarc acquires Snapple, they are left with some majors decisions In this case; Mark Weinstein‟s company Triarc acquires Snapple, they are left with some majors decisions to make in order

to make in order to rebuild brand equity and reestablish brand value.to rebuild brand equity and reestablish brand value.

Recommendations

Triarc are now going to

Triarc are now going to face a major face a major challenge in building brand equity and reestablishing brand imagechallenge in building brand equity and reestablishing brand image and value. There are

and value. There are various options that Triarc can choose to adopt. Primarily Triarc should implementvarious options that Triarc can choose to adopt. Primarily Triarc should implement the suggestions

the suggestions made by Snapple‟s advertising agency, Deutsch Inc. The study carried out bymade by Snapple‟s advertising agency, Deutsch Inc. The study carried out by Deutsch is Deutsch is aimed to revitalize brand. According to the

aimed to revitalize brand. According to the study the reports attempt to focus on brand study the reports attempt to focus on brand identity andidentity and indicate information about Snapple‟s target customers.

indicate information about Snapple‟s target customers. Secondly Triarc must implement a Secondly Triarc must implement a marketing planmarketing plan that embraces the unique characteristics that set it

that embraces the unique characteristics that set it apart from the competition in the beverage apart from the competition in the beverage industry.industry. Finally Triarc must find new promotional avenues to reintroduce Snapple into popular culture, making it Finally Triarc must find new promotional avenues to reintroduce Snapple into popular culture, making it aa fashionable brand.

fashionable brand.

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 Immediate action should be focused on the implementation of the Immediate action should be focused on the implementation of the suggestions from the culturalsuggestions from the cultural

analysis repor

analysis repor t given in Deutsch‟s studyt given in Deutsch‟s study. The report attempts to . The report attempts to focus on brand identity andfocus on brand identity and indicate information about Snapple‟s target customers. This report states that Snapple appeals to a indicate information about Snapple‟s target customers. This report states that Snapple appeals to a very specific type of consumer falling between the

very specific type of consumer falling between the typical soft-drink consumer and the healthtypical soft-drink consumer and the health fanatic. Snapple is an all-natural, fun

fanatic. Snapple is an all-natural, fun and unique beverage alternative and it can be and unique beverage alternative and it can be referred to asreferred to as the perfect choice when cho

the perfect choice when choosing a refreshing beverage at the osing a refreshing beverage at the end of a long day. end of a long day. Snapple mustSnapple must embrace its soothing taste and make its beverage a part of consumers‟ daily ritual.

embrace its soothing taste and make its beverage a part of consumers‟ daily ritual. Consumers Consumers should be encouraged to take a moment

should be encouraged to take a moment to enjoy Snapple.to enjoy Snapple.

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 Reintroducing the brand back into mainstream entertainment by finding new figures, radio showsReintroducing the brand back into mainstream entertainment by finding new figures, radio shows

and television programs to promote the product. The results from

and television programs to promote the product. The results from the study also suggested thatthe study also suggested that most of the Snapple consumers still associate Snapple with

most of the Snapple consumers still associate Snapple with Wendy Kaufman. Incase Wendy isWendy Kaufman. Incase Wendy is not willing to reestablish this relationship then a similar personality could be considered as an not willing to reestablish this relationship then a similar personality could be considered as an association. Secondly it is unlikely to

association. Secondly it is unlikely to reestablish relationship with relations with Stern andreestablish relationship with relations with Stern and Limbaugh because of the way the

Limbaugh because of the way the relationship was ended. However there are certainly other radiorelationship was ended. However there are certainly other radio programs and TV shows

programs and TV shows that can help in promoting ththat can help in promoting the brand.e brand.

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 Lastly and most importantly must focus on taking an initiative to increase Snapple‟s warmLastly and most importantly must focus on taking an initiative to increase Snapple‟s warm

channel availability. In order to do that Snapple

channel availability. In order to do that Snapple must reestablish relations with distributmust reestablish relations with distributorsors because Quaker has been able to un

because Quaker has been able to undercut the distribudercut the distributors and forced them into a partnershitors and forced them into a partnership withp with Gatorade. Snapple can take advantage of ar

Gatorade. Snapple can take advantage of areas where sales have always been eas where sales have always been weak. Additionallyweak. Additionally should increase the availability of Snapple in the supermarkets. Increased sales in the

should increase the availability of Snapple in the supermarkets. Increased sales in the supermarkets and other warm channels will make the

supermarkets and other warm channels will make the product more abundant to consumers inproduct more abundant to consumers in greater varieties and will also allow them to

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Conclusion

Snapple‟s popularity has been based on unconventional promotion methods unlike its competitors who Snapple‟s popularity has been based on unconventional promotion methods unlike its competitors who are using conventional methods and techniques. Quaker overvalued Snapple and thought that the previous are using conventional methods and techniques. Quaker overvalued Snapple and thought that the previous growth would continue. They were wrong to assume that

growth would continue. They were wrong to assume that Snapple would grow as Gatorade had been aSnapple would grow as Gatorade had been a successful brand. Quaker should have evaluated Snapple‟s growt

successful brand. Quaker should have evaluated Snapple‟s growt h prospects more realistically and used ah prospects more realistically and used a more modest growth rate. To

more modest growth rate. To build brand equity and reestablish brand image and value, Triarc now build brand equity and reestablish brand image and value, Triarc now needsneeds to take vital steps to make

to take vital steps to make Snapple a fashionable brand. We believe that in Snapple a fashionable brand. We believe that in order to do so Triarc mustorder to do so Triarc must adopt three options immediately, firstly focus on market segmentation, secondly must implement a adopt three options immediately, firstly focus on market segmentation, secondly must implement a marketing plan to reintroduce the brand back into

marketing plan to reintroduce the brand back into mainstream entertainment and thirdly must take anmainstream entertainment and thirdly must take an initiative to strengthening the distribution system.