Snapple Case

"Snapple"

There are several types of beverages in the consumer market today, and each of them caters to a very diverse group of customers around the world. One particular brand name "Snapple", has survived the market since 1972, even with it changing ownership several times. The Harvard Business case study on Snapple provides the background on how the beverage idea was created, and the decisions that contributed to its early success between 1972 and 1993. It also provides information about Quakers acquisition of the company in 1994, and what decisions were made that changed the success in a four year period. The last part of the case study discusses the Snapple acquisition from Triarc Company in 1997, and the process the company took to revive the brand image. The number of companies that compete in the beverage market will continue to grow well into the future, so it is important to know what the consumers are looking for in a product if you are going to be successful.

The reason Snapple flourished when so many small start-up premium fruit drink companies stayed small or disappeared is the way they marketed their product using the marketing mix tools of product, price, place, and promotion. In the 80's, young, health conscious urban professionals sought out beverages and foods with added health benefits. Arnie Greenberg recognized this trend in the 1960's and teamed up with his friends Leonard Marsh and Hyman Golden to build the Snapple brand which was "100% Natural" which became Snapple's mantra on every product it sells today (Deighton, 2003). I think that Snapple's promotion of 100 percent natural appealed the most to the consumers back then and even today where consumers desire to eat and drink healthier products. I also believe that the product line during this period was so broad, the consumers were able to experiment the many options and trusted that Snapple provided a premium product that could be trusted no matter what the flavor. "Snapple's fifty flavors during the 80's consisted of carbonated drinks, fruit flavored ice teas, diet juices, seltzers, isotonic sports drink, and Vitamin Supreme. This large assortment of premium price products proved successful, since the desired products covered the loss on products that failed in the consumer market" (Deighton, 2003). Today Snapple has 42 products, to include the 28 different flavors of iced teas, 100% juiced, Spring Water, Snap Tea, and Snap Punch (Snapple.com, 2013).

In 1987 Snapple hired Carl Gilman to run sales and marketing. He put together focus groups to assist him with the Snapple label design. He also increased the advertising budget to one million dollars to strengthen the independent distributor system on the East Coast. These two promotion items alone led the company to even greater success. "The focus groups are part of developing the Customer Value Proposition, which ask customers what value they would put on potential market offerings" (Kotler & Keller, 2012). It appears that the outcome of the design was "100% Natural" with a picture of the fresh fruit to depict a healthy option in the beverage industry. Snapple also hired spokes model Wendy Kaufman and sponsored two popular people in shock radio, Howard Stern and Rush Limbaugh. These three famous people launched Snapple to even greater success using Communication channels of TV and radio with their contagious regard for the Snapple products and the business that created them (Deighton, 2003). The success of Snapple was evident through their sales numbers. Snapple rose from 80 Million in 1989 to over 516 Million in 1993 (Deighton, 2003).

In 1994, competition was growing in the beverage category and Snapple maintained 30 - 40 percent of the market share. The sales in 1994 were around 674 Million, so the company made the decision to sell Snapple to Quaker Oats for 1.7 Billion dollars. The choice to buy Snapple when competition was growing rapidly could be one of the reasons their sales began to drop over