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Dr Pepper: A Growing Corporation
Overview
Who might one say is the oldest soft drink in the United States, a formula, a taste: that
has transcended time and changing fads? This cola stands alone, a refreshing combination of 23
trademark flavors that distinguish the Dr Pepper experience from any other soft drink on the
market. Wrapped in the iconic Red label, bottles stand tall: offered in 20 oz individual bottles.
Dr Pepper knows what it takes to create a successful product and how to continue being
successful over a significant period of time. Their ability to stay relevant, better yet: a giant in
their industry of choice, has them ranked among the top-3 in international soft drink market share
(Statista.com statistics, 2015, Table 1).
Dr Pepper is available in select stores worldwide depending on a number of variables
such as local bottling contracts and consumer preference in said country. Though Dr Pepper is
considered a luxury product, the drink is economically priced and can be easily bought in stores
across the United States. No kids, you don’t have to be 21 to enjoy the complex and refreshing
combination of 23 flavors that only Dr Pepper is known for. Dr Pepper is priced at around $1.50
individually according to Walmart, Sam’s Club, and Target websites, and frequently goes on sale
dropping its prices to very reasonable levels.
Created in Waco, TX in 1885, Dr Pepper is the oldest soft drink brand in the United
States. Dr Pepper strikes a unique balance between refreshment, a quick snack and rehydration.
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The drink has changed to adapt to the times but has retained its essential essence over the years.
The logo is the most evident change as it looks nothing like the original black and white logo
found on the first Dr Pepper advertisements . Another change that Dr Pepper has undergone is
that of product adjustment as society standards mandate by replacing sugar with high fructose
corn syrup as the primary sweetener.
Dr Pepper is branded very similar to that of contemporary alcohol and their
advertisements. These ads nearly always feature millennials socializing and having fun all while
heavily featuring Dr Pepper, or observing Dr Pepper as a centerpiece of the gathering.
Additionally, with a significant focus of the modern campaign being on the unique blend of 23
flavors that creates Dr Pepper’s iconic flavors, Dr Pepper has channeled this into celebrating
diversity and uniqueness in people. The “Be a Pepper” campaign is heavily featured in virtually
all of their major advertisements with the message to celebrate one’s unique qualities as a badge
of honor, not something to be dissuaded by. So crack open a bottle, and together lets explore the
oldest, most unique soft drink in American history.
History and Product Information
The Dr Pepper Snapple Group is the company that sells Dr Pepper products. Dr Pepper,
part of the Snapple Group, is known as the oldest major manufacturer of soft drink concentrates
and syrups in the United States. Created in Waco, Texas in 1885, by a young pharmacist, Charles
Alderton, who wanted to create a soft drink that tasted like it smelled.
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The first bottle of Dr Pepper was sold in 1885 at Morrison’s Old Corner Drug Store
where Alderton worked. The name “Dr Pepper” was inspired by the father of a girl the store
owner was once in love with, Dr. Charles Pepper. Dr Pepper grew in popularity after its
introduction to the masses at the 1904 St. Louis World’s Fair (History of Dr. Pepper, 2007).
The Dr Pepper Snapple Group makes: 7UP, A&W, Canada Dry, Crush, Deja Blue, Diet
Rite, Hawaiian Punch, Motts, Clamato, Sunkist, Squirt, Sun Drop, Yoohoo. The Dr Pepper
Snapple Group briefly made Dr Pepper Red Fusion from 2002-2004 and Dr Pepper Berries &
Cream from 2006-2007. The Dr Pepper Snapple Group created Cherry Vanilla Dr Pepper in
2004 and Dr Pepper Cherry in 2009. Heritage Dr Pepper was released in 2009, a re-release of the
original formula, and Dr Pepper Vanilla Float summer 2014.
The Net Sales of Dr Pepper Snapple Group were $6,121 million in 2014 and $5,997
million in 2013. Return to shareholders in 2014 - $717 million. Dr. Pepper contribution to Dr.
Pepper Snapple Group- $54.23 million in 2014 (Dr Pepper Snapple Group, 2014).
Advertising
Dr Pepper’s Advertisements are directed at the younger generations; therefore the
majority of their ads are produced through technology. The most successful Dr Pepper ads are
their commercials, broadcasted on many channels all over television.
All of the ads that Dr Pepper produces are about being “One Of A Kind.” The first ad,
“Barbershop,” is about a town where everyone dresses the same, does the same thing and has the
same routine. Until one man drinks a Dr Pepper and realizes that he wants to be different and, to
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everyone’s surprise, gets a different haircut
(https://www.youtube.com/watch?v=L2caA7VS3Aw).
The second ad, “Mop Dog,” is about a Komondor dog. The dog looks like a mop and is
upset that he isn’t as cute as the other dogs. He does not understand why no one seems to want
him, but after a Dr Pepper trucker takes him in, he realizes that being different isn’t so bad after
all (https://www.youtube.com/watch?v=WegzlLehL5o).
The third ad, “Dr. Pepper: /1 - Mikaela Mayer,” is about a female fighter. She states “millions of
girls are told they’re pretty, but not many put their face in front of someone who wants to
rearrange it.” That is what makes her one of a kind
(https://www.youtube.com/watch?v=0vDVUfPl70Y).
The fourth ad is “I’m A Pepper,” the great commercial hit of the 70’s. The ad goes on to
promote “being a pepper” as being something that everyone should do because Dr Pepper
doesn’t taste like anything else and its original, therefore all who drink it are original too
(https://www.youtube.com/watch?v=gQPN3UKQM-U).
The final ad is the “Always One of a Kind” commercial. This commercial shows a man
in the middle of the hustle and bustle of a train station and all of a sudden he takes off his suit
revealing a shirt that says, “I’m one of a kind.” The rest of the commercial shows people all over
the streets wearing t-shirts saying what they are. For example: “I’m a fighter,” “I’m a rebel,” and
“I’m a beginner”. Dr Pepper allows you to be who you are, no matter how different.
(https://www.youtube.com/watch?v=ny7y0XeinGQ).
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Dr. Pepper’s whole ad campaign is based on the slogan “Be One of a Kind”. With the
message talking about being an individual, it leads us to believe it is directed at younger
generations because teenagers are the most influential. Dr Pepper wants people to stray from the
norm (drinking Coke) and drink the one-of-a-kind Dr Pepper. All of their ads depict young,
powerful and strong males and females proud of whom they are, even if they’re a little different.
Industry Overview
Dr Pepper Snapple Group is a company that is in the Beverage/ Soft drinks Industry. Dr
Pepper Snapple Group’s net sales have increased by 485 million from sales of 5,636M in 2010 to
6,121M in 2014 (United State Securities and exchange commision). The Forbes article,
“Earnings Round-Up: Coca-Cola, PepsiCo And Dr Pepper Snapple,” talked about the net volume
sales of Dr Pepper being 80% in carbonated soft drink Coca-Cola 64% and PepsiCo 17%. Dr
Pepper does not dip into international markets like its competitors Coca-Cola and PepsiCo and
its revenues are about 90% in America (Earnings Round-Up:Coca-Cola, PepsiCo And Dr Pepper
Snapple, 2015).
Currently people would assume Coca-Cola and Pepsi would be a better investment due to
the higher net profit and slightly higher growth rate. However, because of the market share; if
Coca-Cola’s and PepsiCo’s price-to-earnings ratio drops slightly or Dr Pepper Snapple's ratio
slightly increases it would lean toward, if not be completely more profitable, to invest in Dr
Pepper (Forbes, 2015). In the beverage industry: Don’t overlook Dr Pepper Snapple Group
stated, “In addition to any growth potential of the company, Dr. Pepper Snapple has also been
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quite consistent in returning value to shareholders. This is a trend that appears to have a
propensity to continue, as expressed by Dr. Pepper Snapple CFO Martin Ellen in the company’s
most recent earning call ( In the Beverage Industry, Don’t overlook Dr Pepper Snapple Group,
2013, p. 2).
Dr Pepper’s external competition begins with Coca-Cola and PepsiCo who place the
company as the third largest soda company. Other competitors are substitute sodas, Tea and
Coffee products, Sodastream which brings the carbonation process into the home and finally
some people are just making healthier decisions (An Overview of Dr Pepper’s Key brands,
2014).
Product Features
Product
Feature
Product Benefit
Oldest major soft
drink brand
Dr Pepper was created in Texas in 1885 and is the oldest major soft
drink brand beating Coca-Cola by a year (Dr Pepper/Seven Up, 2015,
Dr Pepper – Products: Dr Pepper/FAQ; Library of Congress, 2015).
Comes in a
variety of
flavors,
caffeine/caffeine
free, and diet
options
Options include Dr Pepper, Diet Dr Pepper, Dr Pepper Cherry and
Diet Dr Pepper Cherry, Cherry Vanilla Dr Pepper, Diet Cherry
Vanilla Dr Pepper, Caffeine-Free Dr Pepper, and Caffeine-Free Diet
Dr Pepper (Dr Pepper/Seven Up, 2015, Dr Pepper – FAQ).
Rich unique
flavour unlike
any other soft
drink
Dr Pepper has a unique blend of 23 different flavors that make it
stand apart from other dark sodas such as the warm acidic taste of
Coca-Cola and the saccharine sweet taste of Pepsi (Dr Pepper/Seven
Up, 2015, Dr Pepper – Products: Dr Pepper/FAQ).
Sold in
The 20 oz. bottle fits perfectly in one’s hand for easy access and on
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individual bottles the go flavor
(20 oz.)
Gluten-Free
Dr Pepper is considered gluten free and is generally considered safe
for consumption by individuals who have Celiac Sprue disease. (Dr
Pepper/Seven Up, 2015, Dr Pepper – FAQ).
High caffeine
content
8 oz. of Dr Pepper contains more caffeine than 8 oz. of Coca-Cola or
Pepsi. (Dr Pepper/Seven Up, 2015, Dr Pepper – Products; Caffeine
Informer, 2015, Caffeine in Coca-Cola Classic; Caffeine Informer,
2015, Caffeine in Pepsi Cola).
Located and
Made in the
United States
Dr Pepper’s corporate office is in Plano, Texas and the soft drink
concentrate is made in St. Louis, Missouri (Dr Pepper/Seven Up,
2015, Dr Pepper – FAQ).
Sold at a variety
of locations
Dr Pepper is sold at all major retail outlets and many gas stations and
vending machines (Dr Pepper/Seven Up, 2015, Dr Pepper – FAQ).
References
Gareth Bill
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Gabriel, B. (2012, Jan. 10). Ad of the day: Dr Pepper. Ad Week, Retrieved online on 2015,
June 18 from:
http://www.adweek.com/news/advertising-branding/ad-day-dr-pepper-137429
Caffeine in Coca-Cola Classic. (2015). Caffeine Informer, Retrieved online on 2015, June 18
from:
http://www.caffeineinformer.com/caffeine-content/coca-cola-classic?
Caffeine in Pepsi Cola. (2015). Caffeine Informer, Retrieved online on 2015, June 18 from:
http://www.caffeineinformer.com/caffeine-content/pepsi-cola
Dr Pepper – FAQ (2015). Dr Pepper/Seven Up . Retrieved online on 2015, June 18,
http://www.drpepper.com/text/faq/#b
Dr Pepper-Products(2015). Dr Pepper. Retrieved online on 2015, June 18, from
http://www.drpepper.com/products/#drpepper
Dr Pepper-Products: Dr Pepper/FAQ (2015). Dr Pepper/Seven Up. Retrieved online on June
18, 2015, from http://www.drpepper.com/info/products/drpepper/faq/
Dr Pepper Snapple Group Annual Report (2014). Dr Pepper Snapple Group. Retrieved online
on June 18, 2015, from http://investor.drpeppersnapplegroup.com/annual-reports
Dr Pepper Snapple Group Product Facts (2015). Dr Pepper Snapple Group . Retrieved online
on June 18, 2015, from http://www.dpsgproductfacts.com/en/
Earnings Round-Up: Coca-Cola, Pepsico and Dr Pepper Snapple (2015, Feb 2). Forbes.
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http://www.forbes.com/sites/greatspeculations/2015/02/20/earnings-round-up-coca-colapepsico-and-dr-pepper-snapple
In the Beverage Industry, Don’t overlook Dr Pepper Snapple Group (2013, Oct 20).Forbes.
Retrieved online on June 18, 2015, from
http://www.forbes.com/sites/chuckcarnevale/2013/10/25/dr-pepper-snapple-dont-overlookthis-beverage-contender/2/
History of Dr. Pepper (n.d.) Dr Pepper Museum. Retrieved online on June 18, 2015, from
http://www.drpeppermuseum.com/about-us/history-of-dr--pepper.aspx
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Coca-Cola Television Advertisements: Dr. John S. Pemberton (2015). Library of Congress.
Retrieved online on June 18, 2015, from
http://memory.loc.gov/ammem/ccmphtml/colainvnt.html
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June 18, 2015, from
http://marketrealist.com/2014/12/overview-dr-pepper-snapples-key-brands/
Market Share of Leading Soft Drink Companies in the U.S. from 2004-2014 (2015, January 3).
Statista, Retrieved online on June 15, 2015, from
http://www.statista.com/statistics/225464/market-share-of-leading-soft-drink-companies-in-theus-since-2004/
United States Securities and exchange commision. (n.d). Dr Pepper Snapple Group Inc.
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http://www.sec.gov/Archives/edgar/data/1418135/000141813515000006/dps10kx123114.htm
Dr Pepper Soda, 24 fl oz (2015, May 20).Walmart. Retrieved online on June 18, 2015, from
http://www.walmart.com/ip/Dr-Pepper-Soda-24-oz/20854248
Barbershop (2015, February 9).Youtube. Retrieved online on June 18, 2015, from
https://www.youtube.com/watch?v=L2caA7VS3Aw
Mikaela Mayer (2013, January 3). Youtube. Retrieved June 18, 2015, from
https://www.youtube.com/watch?v=0vDVUfPl70Y
Dr Pepper Always One of a Kind (2012, September 19).Youtube. Retrieved June 18, 2015,
from https://www.youtube.com/watch?v=ny7y0XeinGQ
I’m a Pepper (2008, March 2).Youtube. Retrieved June 18, 2015, from
https://www.youtube.com/watch?v=gQPN3UKQM-U
Mop Dog (2015, January 12).Youtube. Retrieved June 18, 2015, from
https://www.youtube.com/watch?v=WegzlLehL5o