Recommendation I: Innovative Promotion Strategy
It is evident that Snapple drink was misinterpreted by the Quaker management, once the decision to turn it from “fashion” to “lifestyle” brand was taken on the top management. While the sales of the Snapple soft drinks fell as consumers felt betrayed and believed that the natural and family brand was “sold out”, people still feel good about the old Snapple experience, based on the following values:
Fun drink with informal and natural proposition;
Sensual experience with high variety, imaginary and special flavors;
Taste experience, created by packaging of the drinks;
Unique drinks, which is differentiated from traditional Coke-style sparkling drink as well as simple water;
Based on the above observations, the first recommendation for the Weinstein is to change its promotional strategy and labeling of the brand. The company should “assume” the decline and present New Snapple in New times. It should also rethink label style, bottle, and its development strategy. That said Snapple should implement the following changes: (1) the drink should be marketed in a single size bottle for immediate consumption on the go; (2) the company should invite consumers to participate in a competition for new label for Snapple, widely using TV and social media to attract ideas; (3) Snapple should choose the best label idea and launch it together with the new bottle. The new bottling and labeling should reflect two major message from the brand: refresh and represent individuals, who care about what they drink but look for more than simple water. Taking this approach to visual marketing will benefit the company in tapping into young and demanding market of individuals that want to associate brand values with their own healthy, free and active lifestyle.
Recommendation II: Product Renovation
The competitive environment in the beverage industry is extremely aggressive. Many large companies, which used to focus on the specific niches, such as Coca-Cola and its sparkling beverages or Starbucks Coffee Company, renown as the coffee and tea producers started to expand their product lines to enter in direct competition with soft drink producers. Moreover, it is evident that the industry is mature and there is very limited room for growth through radical and breakthrough innovation as the companies should respond fast and cost-effectively to the market needs. With that, the key to success in beverage market is the incremental innovation. The analysis of the current situation illustrates that Snapple is no longer a customer-driven brand and, thus, incremental innovation is secondary to the company. Hence, it is recommended that Snapple’s strategy is centered around product renovation and extension thinking, which involves three major elements:
Investment in incremental innovation, such as” talking” label;
New product line development and;
Product extension strategy.
More specifically, the company should ensure continuous update of the label to reflect the core messages that it wants to send to the clients. The label design should be changed on a trimester basis and "talk" about nature, real authenticity, silliness, individualism, irreverent and other values and associations, placing Snapple further from Coca-Cola and water brands. Secondly, the brand should introduce new product lines in cold tea segment to build in immediate customer interest and offer diversified and unique to the market products to the customers. Finally, it is recommended that the company uses its innovation capacity and budget to create product extension through loyalty programs and customer-facing social media application, which builds on Snapple Coalition and provides the interactive environment, where Snapple users can share experience, look for health hints and feel “belonging” to the Snapple “tribe”.
Recommendation III: Platform Strategy through snack options
The current product line of Snapple is centered around juices and cold teas. The market trends reflect the need of an extension of the product line to offer more interesting Brand association. As such, we discussed before that Coca-Cola entered in snacks, dairy, and organic food market through effective acquisition strategy, Starbucks Coffee Company recognized the need to address consumers that do not like coffee and started offering tea, lemonade, and other soft drinks, apart from a line of healthy snacks. This strategy offers effective ways to increase revenue stream and tap into different markets. Given the ambitious growth strategy that the management outlined for Snapple, it is recommended that the company extends its drink options to new formats, such as juice bars, squeeze drinks and smoothies. This product extension, which offers familiar Snapple tastes in the quirky and offbeat presentation will make regular normal people feel special. Moreover, such strategy and new product formats will build on platform strategy, which increases the brand equity through bringing "young" and "cool" thinking into the healthy lifestyle at reasonably low marketing cost, using social media (Davies, 2016). It should be taken into consideration that platform strategy for Snapple will also allow reducing the costs as the Brand will be able to launch new product in short life cycle market faster and at a minimum Research and Development (R&D) cost.
Recommendation IV: Product Placement Strategy
Distribution is the key for increasing the sales and leveraging the risks, associated with a reduction of demand based on demographic challenges and channel seasonality. As such, the analysis of the current situation and the development of the company illustrates that until today, warm channels were almost exclusive to Snapple brand. While warm channels, such as supermarket chains and large food and beverage retailers outline critically important product placement strategy, the company should focus on product placement diversification to address the following:
Brand visibility;
Brand image;
Sales volume.
It is recommended that Snapple marketing and sales teams look for the ways to enter such sales channels as schools, metropolitan flagships, and restaurants. It is possible to argue that new presentation of the brand through exclusive one-size individual bottling, product extension and platform strategies are aligned with the expectation of this market. The company can significantly increase its visibility by being presented in schools, as young consumers are more perceptive to new formats, such as squeeze and smoothies. Schools represent a huge market potential of individuals that already make their own choices. Secondly, by entering these cold channels and being part of the daily experience of its target customer, the company will be able to change its image to more imaginary, experiential, vivid and sensory. Finally, restaurants, schools, and metropolitan flagships are centered around food and beverage retail and the company will be able to naturally increase its sales, tapping into a new market segment. While some of the clients, who are currently by Snapple’s through warm channels will also opt for this drink a restaurant and school, the company can benefit from building the incremental customer base, which was not familiar with the drink before or considered it not their “style”.
Conclusion
Snapple offers the healthy and simple product for the customers, which was well-received by the market for a long time. He changes in marketing strategy and the lack of the market research based on customer psychology resulted in wrong decisions on sales and marketing side as well as logistics challenges for the company. Consequently, the sales of Snapple brand under Quaker leadership fell by over 40% and the brand was sold to Triarc. Despite severe competition on the market, the acquiring company considers that Snapple brand can be revived. The four recommendations, focused on increasing sales, changing the Brand message and identity and increasing customers’ bond with the company, were made for the management. It is possible to argue, that by implementing these changes and strategy the company will be able to reach its sales targets through building on incremental client base, improve its brand image and visibility as well as and effectively diversify sales channels.
References
Davies A. (2016). Best Practice in Corporate Governance: Building Reputation and Sustainable Success. 2nd Edition. London: Gower Publishing.
Keller, M. & Horn P., (2003). Strategic Management. 2nd Edition. Journal of Literature, 12(5), pp.66-89.
