Dr. Pepper/Seven Up, Inc: Squirt Brand
How would you characterize the carbonated soft drink industry
in the United States?
The U. S consumer drinks more carbonated drinks than tap water which makes the soft drink industry in the U.S is excessively lucrative, but an aggressive competitive market. For example, Americans in the year 2000 consumed an average of 53 gallons of soft drinks per person and it represented a $60.3 billion in carbonated soft drink retail sales for that year. Nevertheless, in the recent years the growth rate of consumption for soft drinks has declined.
There are three big players in the production and distribution that hold the majority of sales ...view middle of the document...
Pepper/Seven Up owns two. These top ten brands account for 73% of the soft drink sales in the U.S.
Even though Colas are the dominant flavor in the U.S soft drink industry and account for 60% of total retail sales in the year 2000, the changing population in the U.S has been an important factor to the augmentation of flavored soft drink popularity. As a result, the Cola flavored soft drinks have lost market share in the past decade from roughly two-third of total retail sales in the1990.
How would you characterize the Dr. Pepper/Seven Up, Inc. and Squirt
competitive situation in the U.S. carbonated soft drink industry?
Dr. Pepper/Seven Up and Squirt are brands that compete in the citrus fruit flavored soda market. The brands have seen flat growth in recent years. Even though Squirt is still the number one selling brand of grapefruit flavored soda in the U.S., lately it has lost ground to offerings from competitors as Pepsi-Cola and Coca-Cola Co.
Five Squirt bottlers account for 50% of sales. These bottlers are located in Los Angeles with (30%), Chicago (7%), Detroit (6%), San Diego (4%), and Portland, Oregon (3%) . Another ten bottler markets represented 20 percent of Squirt case volume. Ten additional bottler markets accounted for 10% Squirts case volume. A total of 100 bottlers account for 50% of the Squirt case volume with these bottlers located predominantly in the Western United States. For example, California alone is responsible for 38% of the total Squirt Case volume in the year 2000. Squirt is the primary brand and it consists of two brand extensions. These extensions include Diet Squirt and Ruby Red Squirt. These extensions have both been successful and account for 20% of Squirt Sales.
Squirt grapefruit flavor competes directly with Coca-Cola’s carbonated grapefruit brands, Fresca and Citra. The first one, Fresca is a caffeine free diet soft drink targeted to adults age 30 and older. The second, Citra is sugared caffeine free version of Fresca targeted to young adults and teens and it does not have a diet version. In both cases, Squirt outsells Citra and Fresca combined by case volume.
Squirt's has the highest consumer brand awareness in the carbonated grapefruit soft drinks in the United States market. Squirt overall expenditure on advertising and promotions is less than its competitors. Advertising used by Squirt includes a variety of media including newspapers, television, and radio.
Squirt was targeted at the adults market between ages of 18-44 years old. The advertising for Squirt focused on the “cool, hip, experimental nature” part of the brand with the message “Beyond the ordinary refreshment—the great citrus taste is incredibly thirst quenching” .The brand’s creative strategy migrated to "spunky, lively, everyday, on the go, sociable, colorful, and music driven" beverage. The market target market was also narrowed to adults 18-34 years old with the message changed to “Squirt...