Snapple's Marketing - An Unconventional Brand's Claim to Fame

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Case Details:

Case Code : MKTG148
Case Length : 23 Pages
Period : 1972-2006
Organization : Snapple Beverage Corporation, Quaker Oats, Triarc Group of Companies, Cadbury Schweppes Plc.
Pub Date : 2006
Teaching Note : Available
Countries : USA
Industry : FMCG

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background

In 1972, childhood friends Leonard Marsh, Hyman Golden, and Arnold Greenberg, set up a company that they named Unadulterated Food Products Inc. (UAF) to sell pure fruit juices in the New York area.

They launched a range of juices, with names like Passion Supreme, Vitamin Supreme, Apple Crisp, and Cranberry Royale. In 1978, they paid $500 to a Texas company for the name "Snapple". The name was given to their carbonated apple drink which, however, did not do well in the market. The name was later extended to all their beverage products, and eventually, the name of the company itself was changed to Snapple Beverage Corporation (SBC).

In the late 1970s, there were many companies that manufactured and sold juices and health drinks, but Snapple stood out from the rest because of its unconventional marketing and distribution strategies.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

From the beginning, the brand had differentiated itself from other beverages with its 'amateurish'approach to marketing. By 1982, UAF added many more varieties of juices to its product portfolio in the non-carbonated drinks segment, which had remained untapped until then. By 1986, UAF had started distributing juices and health drinks through health stores. In 1987, the company launched Snapple iced teas, which became an instant success as the ready-to-drink⁸ tea segment was also a fledgling segment till then.

In 1994, Quaker purchased Snapple for $1.7 billion⁹, in a major move to strengthen its beverage portfolio, which at that time consisted only of the leading sports drink Gatorade.¹⁰ By then, Snapple's sales had risen to $700 million.¹¹ However, according to analysts, the acquisition turned out to be one of the greatest debacles in the history of corporate mergers and acquisitions.

They said that the takeover was mistimed as Snapple's sales growth had just begun to slow down in the tea category after PepsiCo Inc. (Pepsi)¹² and the Coca-Cola Company (Coca-Cola)¹³ had launched their tea products in the early nineties.¹⁴

Excerpts >>

8] Ready-to-drink teas include both hot and iced tea.

9] Dollars ($) refers to US dollars in this case study.

10] Gatorade, a leading sports drink brand, is meant to re-hydrate and replenish carbohydrates and electrolytes. Though it was originally targeted at athletes, non-athletes also consumed the drink. It was marketed by Quaker Oats Company, which was acquired by PepsiCo in 2001. Source :www.wikipedia.org (Accessed on August 28, 2006)

11] "Quaker's Sale of Snapple Ends One of the Worst Merger Flops in History," Weekly Corporate Growth Report, www.findarticles.com, April 21, 1997. (Accessed on August 21, 2006)

12] PepsiCo is a global manufacturer and marketer of beverages and food. It was the world's number 2 carbonated soft-drinks maker in 2006.

13] Coca-Cola Company is the leading beverages manufacturer and marketer, and as of 2006, produced the world's Number 1 carbonated drink, Coca-Cola.

14] "Quaker's Sale of Snapple Ends One of the Worst Merger Flops in History," Weekly Corporate Growth Report, www.findarticles.com, April 21, 1997. (Accessed on August 21, 2006)

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