Dr. Pepper 10
Professor Nothnagle
Robert Haggerty
March 26, 2014
I.
EXECUTIVE SUMMARY
The Dr. Pepper Snapple Group is one of the leading carbonated soft drink
producers (CSD) within the Americas. The organization produces more than
50 prominent brands including Dr. Pepper, 7 up, Canada Dry, Clamato Juice,
Country Sweet, Crush, RC Cola and many more thirst quenching products. In
2008 the organization broke off from its previous mother company of
Cadbury Schweppes and ever since has stated its dedicated to innovation, bold
and distinct flavors, and entrepreneurial spirit.
Dr. Pepper 10 is an extension from the classic Dr. Pepper brand. Unlike
the original Dr. Pepper or even diet Dr. Pepper, Dr. Pepper 10 is featured to
have only 10 calories. The point of Dr.Pepper 10 as opposed to Diet Dr.
Pepper is to target male consumers, as research has shown that traditional diet
sodas comes off as a “Girly” choice of soft drink. Dr. Pepper Ten is imposed
to be a health conscious soft drink choice for the man who has a preference in
choice based upon psychographic perceptions of hyper masculinity. Dr.
Pepper 10 is a convenience good offered at thousands of grocery and
convenient stores around the country as well as in Canada and Latin America.
The product being released in 2011 is in its growth stage because the product
has been on shelves though the company is still trying to build product
awareness.
II.
Environmental Analysis
Dr. Pepper Snapple Group is often over shadowed in the American beverage
market by the big brand names of Coca-Cola and Pepsi Co. Though Dr. Pepper
and Snapple Group holds to be the third largest beverage distributor holding 16%
of the total CDS market.
A.) The Marketing Environment
1.)
Competitive Forces: Each of the three main American CDS
distributors, being Coca-Cola, Pepsi Co. and Dr. Pepper Snapple
Group (DPS) have within the different brands in which they control
their own types and flavors of diet soda. Among these include the most
popular competitors of Diet Coke, Diet Pepsi, Pepsi MAX, and Coke
Zero. Coke and Pepsi have attempted to create the same kind of diet
soda for men through the Coke Zero and Pepsi MAX products by
creating soda extensions with few or no calories that do not state
themselves as being “diet” sodas. As Dr. Pepper is the brand with less
market share than the other two major soda distributors, they must have
a bold marketing strategy to distinguish themselves from competition
for this particular line of beverage. Also in a time where health
conscious options are favorable to many consumers, the beverage has
competitors with non-soda, juice or water based beverage brands as
well.
2.)
Legal and Regulatory Forces: In recent years there has been much
controversy over regulating the sales of sugary soft drinks, particularly
in schools. These regulations preventing sales of soft drinks to the
youth could cut into sales as well as stunt the creation of brand loyalty
in younger consumers who have potential to become life long buyers.
As well as regulations on where the product can be sold some states
hold sin taxes on such soft drinks, which could be another threat to the
profitability of the product.
3.)
Sociocultural Forces: The main purpose for this extension of the Dr.
Pepper brand name is to break through the sociocultural forces that
make men think that diet soda is for women, so concurring these forces
are very evident towards the success of the product. The product
extension of Dr. Pepper 10 will need to distinguish itself from being an
ordinary diet soda in order to avoid the perception that the soda is
“girly” if the company wants to market effectively to the male
consumer.
Even though Dr. Pepper 10 is a lower calorie soft drink, there are
still many who believe all sodas to be unhealthy. As America as a
whole is going through a health conscious revolution, the options of
juice drinks, sports drinks, or water as a thirst quenching alternative
will prove to be another environmental threat to the product.
B.) Target Market
Dr. Pepper 10’s target market consists of male soft drink consumers who
are health conscious and wish to drink a lower calorie soft drink. The purpose of
the Dr. Pepper 10 extension is to distance the product from the more traditional
“diet” soda, which leaves the perception to many men of anti masculinity. The
product is marketed in a way that signals the complete opposite of what is usually
thought of when thinking about a diet soda with the slogan of “Its Not For
Women.” The product allows men to enjoy the distinctly different and enjoyable
taste of Dr. Pepper without the extra calories or the perception of being feminine.
C.) Current Marketing Objectives
Going along with the products target market, Dr. Pepper 10 has formed
their marketing objectives to reach young adult men. To do so, you will
commonly see commercials for the product air during on all major networks but
only during air times in which show that are highly watched by mail viewers. The
television campaign airs heavily on FX and ESPN during college football season
but also has showed a heavy presence in the NCAA basketball tournaments
during the past three years.
There are other competitors that aim to reach the same group of health and
masculinity conscious male consumers such as Pepsi max and Coke Zero.
Though neither competitors have gone so out of the way to prove the point that
Dr. Pepper wishes to make about their product. Apposed to the traditional Diet
Dr. Pepper can in which there are bubbles along the outside packaging trying to
convey a light soft drink, Dr. Pepper 10 conveys its message with a gun metal
grey can with bullet holes around the exterior packaging design. This packaging is
accompanied by a district maroon Dr. Pepper label that points out the drink has
“10 Bold Calories”, which gives a masculine contrast to the grey on the can wile
making the 10 calories in the drink sound more masculine.
III.
SWOT ANAYLYSIS
A. Strengths
1.) The Dr. Pepper Snapple Group (DPS) name is very well know in the soft
drink industry as the third largest market share owner. The original Dr.
Pepper, created in 1885 has deep routes in the CSD (carbonated soft drink)
industry as a prominent beverage name, which will aid the extension of the
brand to sell with normal Dr. Pepper drinkers.
2.) The size and range of the mother company Dr. Pepper Snapple group will
allow the company to distribute Dr. Pepper 10 to a wide range of stores all
around the county as well as in Canada and Latin America.
3.) Excluding the “Diet” from the product name helps to distinguish the lower
calorie CDS from being perceived as un-masculine.
4.) DPS has a very well organized R and D, marketing, and distribution team that
works on a highly professional level keeping operations involved with the
product highly efficient to maximize profits.
5.) DPS has existing beverage bottling contracts with major beverage companies
as well as their own bottling plants, which provide them with relatively low
cost bottling aiding the companies production.
6.) Strong Company employee base.
B.) Weaknesses
1.) DPS being only the third largest market shareholder in the CDS industry has
very influential competitors with national and global connections such as the
Coca- Cola Company and Pepsi. These competitors also have market bases in
countries outside of the Americas which, giving them a larger customer and
revenue base to pull from.
2.) Many health conscious consumers see the preservatives added to lower
calorie soft drinks to be worse for them than drinking a full calorie choice.
3.) Some consumers may see the edgy marketing strategy taken towards Dr.
Pepper 10 as over the top or offensive with such phrases used as “its not for
women” appearing regularly in advertisements.
C.) Opportunities
1.)
Studies have shown that across America, health conscious decision regarding
what consumers eat and drink have become much more prominent and the Dr.
Pepper 10 soft drinks lowered calorie content will help to tap into this portion
of consumer buying decisions.
2.)
The male consumer group is generally dissatisfied with the image as well as
the taste of Diet soft drinks. Dr. Pepper Ten provides a lower calories soft dink
that avoids perception of being “girly” and has no reduced flavor keeping the
distinct taste of Dr. Pepper that consumers are loyal to.
3.)
Dr. Pepper has a very distinct taste that is different from the major competitors
Cola taste. This extension of the original Dr. Pepper taste with fewer calories
can be a great alternative for consumers who are brand loyal to Dr. Pepper but
wish to drink a more health conscious beverage.
D.) Threats
1.) Legal action preventing sales of sugary drinks in schools.
2.) Sin taxes invoked on soft drink sales could cut into sales and profits.
3.) The un-woman friendly perception that is portrayed in product advertising could
be viewed as offensive, leaving negative word of mouth about the specific
product as well as other products under the same brand name.
E. Matching Strengths to Opportunities/ Converting Weaknesses and Threats.
1.) Using Dr. Pepper’s large wholesale buying base, the company can negotiate a
marginal discount in cost of a total order for purchasing a certain amount of Dr.
Pepper Ten. This will allow that product to get into stores and in front of
consumers nation wide as well as internationally.
2.) The strong Dr. Pepper distributor base will aid in matching the new product
extension with already brand loyal Dr. Pepper drinkers that will try and enjoy the
product since the flavor of the drink has not been compromised for fewer calories.
3.) With the highly efficient operations that occur within the DPS organization, the
added cost to consumers through sin tax can be negated with a price decrease.
This will also place the product at a lower price level than competitors aiding
them in further distinguishing the product to the consumer making a soft drink
decision.
4.) To stay away from the perception that Dr. Pepper is a sexist organization, the
company could launch a philanthropy division that focuses on breast cancer
awareness. This will help avoid consumer perceptions that Dr. Pepper is only
interested in men while also building a good reputation for the company that will
aid in overall sales.
IV:
Marketing Objectives
The objectives of Dr. Pepper 10’s marketing campaign is to change the
psychographic perception in the consumers mind of a lower calorie soft drink not being
“Manly” enough for men to drink. Along with this Dr. Pepper is trying to create long
lasting consumer awareness towards this psychographic change. To do so Dr. Pepper has
released a number of very bold advertisements through TV commercials, radio, and
online advertising and promotions using hyper masculinity and humor to brand there idea
of a manly diet soda into the consumers mind.
V:
Marketing Strategies
A.) Target Market
- Males Age 18 to 45 that are health conscious and self conscious enough to
perceive diet soda as being feminine.
-
Young men in there teens and younger who idolize the masculine figure
represented in the advertisement campaign. This target market if reached
correctly could be a life long consumer.
B.) Marketing Mix
1.) Product Mix: The Dr. Pepper Snapple Group strides to be one of the top
beverage production and distribution company’s in the Americas. With their
diverse product lines, they hit most target market with a top of the line and
popular product. To extend off of these more popular products, extensions
such as Dr. Pepper 10 are created to attempt to further satisfy consumers who
are looking for something different. Dr. Pepper 10 looks to satisfy the male
Dr. Pepper consumer who is looking for a low calorie alternative to the
original and unique taste of Dr. Pepper.
2.) Price: Dr. Pepper 10 is competitively priced against its competitors from
different brands such as Coke and Pepsi. They are very careful to look at
competitors prices before setting there own so that they do not throw off the
market price and miss the consumers that they are looking for. The product is
also not priced much lower than competitors to keep the image that Dr.
Pepper 10 is a high quality product and not an inferior good.
3.) Distribution: Dr. Pepper Snapple Group distributes its products throughout the
Americas. To do so there is a combination of both direct store delivery as
well as distribution to middle men distributors or wholesalers. This is
supported by the companies 21 manufacturing centers and more that 115
distribution centers. Dr. Pepper 10 can be found in convenience stores,
grocery stores, gas stations, warehouse venders, and other convenience
distributors.
4.) Promotion: Dr. Pepper uses competitive advertising to differentiate their
specific product from other diet sodas that could fall into the same market. To
do this, the company has launched a number of advertisements stressing the
“manliness” of the product through a variety of different advertisement
mediums. These mediums include TV commercials, radio ads, online
advertisement, and specialty promotions.
VI.
Market Implementation
A.) Marketing Organization:
Dr. Pepper Snapple Group uses a combination of both direct to store
distribution as well as distributing to wholesalers or middlemen. To do this
the company operates out of 115 distribution centers nationwide that work on
logistics to assure that all Dr. Pepper customers receive there order on time
and with complete satisfaction. To uphold the brand name and customer
loyalty all of these operations are of the upmost importance to the Dr. Pepper
Snapple Groups short and long-term goals.
B.) Activities and Responsibilities:
Current advertising activities that promote Dr. Pepper 10 include TV ads,
radio ads, online ads and so on. The premise of the advertisement campaign is
to create a sense of hyper masculinity that is associated with the beverage. I
believe that some celebrity sponsorship could greatly aid this effort by
associating a well know masculine figure with the Dr. Pepper 10 product
through a television add. Possible candidates for this position could include
stars like Hulk Hogan, Arnold Schwarzenegger, the Rock, or other popular
masculine action movie stars.
VII.
Evaluation and Control
A.) Performance Standards and Financial Control:
The Dr. Pepper Snapple Group is a very well organized company with
“Improving operation efficiency” at its very core as stated in their mission
statement. The company works to allocate their funds in the most efficient and
appropriate way possible, including giving money toward numerous non- profit
organizations, especially those on the mission for sustainability. Advertising is an
important part of the DPS budget as they are in a highly competitive and
somewhat saturated market. It is crucial to distinguish brand recognition, as there
are hundreds of competitors in which the consumer has to choose from when
looking to quench their thirst.
B.) Monitoring Procedures:
Monitoring sales and operations is an important part of how DPS continues to
operate in an efficient manner. Product sales are over looked very carefully to
make sure that the product is reaching its intended target and will be turning a
profit. Long-term sales increases are crucial for DPS in the highly competitive
market that they operate in.
Bibliography
"2013 Letter to Stockholders." DrPepperSnappleGroup.com. N.p., n.d. Web. 06 Apr.
2014.
"USA TODAY." USATODAY.COM. N.p., n.d. Web. 07 Apr. 2014.
"Dr Pepper - Products." Dr Pepper - Products. N.p., n.d. Web. 09 Apr. 2014.