Case Analysis and recommendations for Dr. Pepper/Seven Up Inc.: Squirt Brand
Dr. Pepper/Seven Up incorporated
Dr. Pepper/Seven Up Inc. is the largest division owned by Cadbury Schweppes PLC, who is the third largest soft drink maker in the world by a landslide. Although only bested by Coca-Cola and Pepsi-Cola, Cadbury Schweppes took Dr. Pepper/Seven Up a little bit of a different route concerning the flavors of their beverages, becoming the number 1 seller of non-cola carbonated soft drinks with the individual brands Dr. Pepper and Seven Up consistently in the top ten soft drink beverages consumed in the United States, the other 8 being owned by Coke or Pepsi. In addition to Dr. Pepper ...view middle of the document...
While the soda industry was estimated to be about 11.73 billion dollars in 1990, but due to exponential growth in consumption and population, the year 2000 yielded a carbonated soft drink market of 60.3 Billion dollars. In fact, it was estimated that Americans consumed more carbonated soft drinks than tap water by the year 2000. Though there has been a major increase in the past ten years as a whole, the past three years proved to become stagnant in terms of growth.
In the soda industry there were three main companies who took control of production and Distribution: Coca-Cola, Pepsi-Cola, and Dr. Pepper/Seven Up incorporated respectively. These three companies owned fifty-four billion of the sixty billion dollar industry, or ninety percent, of what was carbonated soft drinks. As mentioned earlier, the big three controlled all ten of the top ten soft drinks consumed in the United States. You can see the market share by company, and by brand below.
Brand | Company | Share % |
1. Coke Classic | Coke | 20.4% |
2. Pepsi-Cola | Pepsi | 13.6% |
3. Diet Coke | Coke | 8.7% |
4. Mountain Dew | Pepsi | 7.2% |
5. Sprite | Coke | 6.6% |
6. Dr. Pepper | DP/SU | 6.3% |
7. Diet Pepsi | Pepsi | 5.3% |
8. Seven Up | DP/SU | 2.0% |
9. Caffeine free diet coke | Coke | 1.7% |
10. Barq’s root beer | Coke | 1.1% |
Company | Share % |
1. Coca-Cola Co. | 44.1% |
2. Pepsi-Cola Co. | 31.4% |
3. DP/SU Inc. | 14.7% |
4. Cott Corp. | 3.3% |
5. National Bev. | 2.1% |
6. Royal Crown | 1.1% |
7. Big Red | 0.4% |
8. Seagram | 0.3% |
9. Monarch Co. | 0.1% |
10. Private label | 2.5% |
Production Operations in the Industry
There are three main parties in the carbonated industry in terms of production and distribution: The Concentrators, the bottlers, and the retail outlets. Historically there are a relatively small amount of concentrators, a large number of bottlers (around 500), and an even larger number of retail outlets. The concentrators are the typical companies mentioned above like Coca-Cola, Pepsi, and Dr. Pepper/Seven Up; these concentrators are at the top of the supply chain. The concentrators produce the flavor- like the Mountain Dew or Coke flavorings for the bottlers to then add the sugar and carbonated water followed by the actual bottling and distribution to retail outlets. The bottlers, even though a separate part of the process, are typically owned, franchised, or have stake held by the concentrators. For example, Coca-Cola Co. is in charge of producing the flavor, which is then sent to a bottling plant to be finish mixing and be bottled, which is owned by Coca-Cola, and then distributed to retail outlets.
Marketing Soft Drinks in the United States
Traditionally, soft drinks in the United States have relied heavily upon advertising and promotion, both at a local and national level. At the top of the supply chain, the concentrators (Coca-Cola, Pepsi-Cola) were in a way the home office. The concentrators were in...