INTRODUCTION
 Cadbury Beverage Inc.is the beverage division of Cadbury Schweppes
PLC.
 Cadbury Schweppes PLC, in 1989, had $4.6 billion of worldwide
sales.
 The company is the world’first soft drink maker and the 3rd largest
soft drink marketer.
 Beverage accounted for 60% of company worldwide sales and
confectionery for 40%.
 Cadbury Beverage Inc. Is the 4th largest soft drink marketer in the US,
with a market share of 3.4%.
ISSUE
There are 3 issues to relaunch the Crush brand on the soft drink market :
 To developp a base positioning
 To build a cooperative relationship with bottlers
 To budget advertising and promotion program
INDUSTRY STRUCTURE
3 major actors in the production and distribution of carbonated
soft drinks :
 Concentrate producers : -over 40 in the US
- manufacture the basic flavor
- Dominated by Coca-Cola, PepsiCo and
Dr Pepper with 82 % of sales
 Bottlers : - convert basic flavor in carbonated soft drink
- package the beverage in bottles and cans
- sell the brands of concentrate producers
- franchised bottlers : package and distribute in a defined
territory, represent noncompetitive brands
 Retail channel : - supermarket, convenience store, vending machines,
fountain service and small retail outlets
- supermarket account for about 40% of sales
INDUSTRY ECONOMICS
 Concentrate producers:
- gross profit of 86% (regular) to
87% (diet)
- pretax cash profit of 16%
(regular) to 30% (diet)
 Bottlers:
- gross profit of 43% (diet) to
46% (regular)
- pretax cash profit of 12% (diet)
to 15% (regular)
 Conclusion: manufacturing diet drinks is more profitable for
concentrate producers and the opposite is true for
bottlers. That is why Cadbury should maximize its diet
drinks market share.
BUYER BEHAVIOR
 Users : - US consumers drink more soft drinks than tap water
- unplanned purchase in supermarkets
- sensitive to price promotions, in-store displays and all pointof- sales promotions
 Geographically : - The national consumption per capita is 46.7
gallons
- per capita consumption in the East South Central
states is the highest with 54.9 gallons
- per capita consumption in the Mountains states is
the lowest with 37.1 gallons
 Season : - higher consumption and purchase during summer
BRANDS & PRODUCTS
 Brands : - More than 900 registered brand name in the US.
- The top 10 brands are marketed by the 3 leading US soft
drinks companies : Coca-Cola, PepsiCo and Dr.Pepper/7up
 Products : - The cola flavor is the most spending soft drink
carbonated in the US with 65.7% of market share
- Orange flavor arrive at the 3rd position with just 3.9% of
market share
 2 segments : - the regular carbonated soft drink
- the diet carbonated soft drink
MARKET SHARE & MARKET
COVERAGE
CRUSH
MADARIN ORANGE SLICE
100
100
87
80
81
81
78
88
88
80
78
Market share
Market coverage
40
20
22
18
Percentage
Percentage
68
62
60
60
Market coverage
40
11
1987
1988
21
8
1989
0
1985
1986
1987
1988
1989
Year
Year
MINUTE MAID ORANGE
SUNKIST
100
100
95
87
88
83
60
Market share0
Market coverage
40
Percentage
80
60
91
88
80
Percentage
21
16
10
0
1986
22
20
14
0
1985
Market Share
86
79
60
Market share
Market coverage
40
32
20
20
10
0
0
1985
14
13
20
14
13
13
14
8
0
1986
1987
Year
1988
1989
1985
1986
1987
Year
1988
1989
MARKET SHARE &
ADVERTISING SHARE
CRUSH
MANDARIN ORANGE SLICE
100
100
80
67
60
Market share
Advertising share
40
20
22
15
18
14
Percentage
Percentage
80
18
14
9
1986
1987
1988
60
62
Market share
Advertising share
40
22
20
11
0
1989
0
1985
1986
80
80
60
Market share
Advertising share
40
Percentage
Percentage
100
0
1985
Advertising share
40
32
20
13
24
20
14
0
1986
1987
Year
1989
Market share
13
13
2
4
1987
1988
8
0
1988
60
35
20
14
1987
SUNKIST
100
20
21
Year
MINUTE MAID ORANGE
36
21
16
Year
40
41
43
8
7
0
1985
60
1988
1989
1985
1986
Year
14
8
1989
BRAND POSITIONING MAP
Teens & young adults
Mandarin Orange
Minute maid
Sunkist
Crush
Family with children
Orange taste
GRAPHICS CONCLUSIONS
 When the market coverage increases, the market share increases too.
 Market share and advertising : Coca Cola & PepsiCo spend a lot even
if they win a small market share.
 We reposition Crush on the family with children market.
SWOT ANALYSIS
FORCES





4th largest marketer in the US
High name
Long life brand
High awareness in big cities
Know-how
WEAKNESSES




Low market share
Low market coverage
Limited bottlers network
Relative low ad & promotion
expenditures
 Risky positioning :
canibalization with Sunkist
SWOT ANALYSIS
OPPORTUNITIES
THREATS
 Variety of medias vehicles
 Dynamic market for diet soft
drinks
 Increase in consumption
 Huge competition
 Heavy advertising expenses
 Unplanned soft drink purchase
KSF :
- Clear positioning
- Market coverage
- Advertising & promotion program
ORANGE CRUSH POSITIONING
Three approaches can be considered to position the Crush brand :

Attibutes : -Natural & competitive taste since 1954
- Bright color
- Regular & diet

Uses : - Orange Crush drinking for fun :during parties & week-end
- Orange is better for health than colas : lots of vitamins

Users : - Orange can be drink by adults, teens and children
- We avoid canibalization with Sunkist
- We target family with children
So we recommend to position orange Crush to the family with children
at home on the regular segment, on the other hand the Crush diet
drink positioning should be aimed at young people in big cities.
CRUSH ADVERTISING & PROMOTION
PROGRAM
 Objectives : - Build a cooperative relationship with bottlers
- Increase our market share
- Relaunch the Crush brand name
 Strategies : - Recruit new bottlers : setting the push stratregy
- Attract new customers : setting the pull strategy
- Increase merchandising & sponsoring
- Enlarge medias network
- Coupons both for regular & diet drinks
MEDIA ADVERTISING
Brands
Advertising
expenditures $
Market
share %
Market share
cases
Advertising
spent per case $
Sunkist
2,301.9
14
44,100.0
0.05
Crush
1,853.6
8
25,200.0
0.07
Mandarine
Orange
Slice
11,388.1
21
66,150.0
0.17
Minute
Maid
Orange
10,463.1
14
44,100.0
0.23
CRUSH ADVERTISING BUDGET
 Budget :
- General : $11,970,000
- Diet : $4,189,500
- Regular : $7,780,500
So we allocate $0.38 per case.
 Allocation : - $0.18 for « dealer loader » ( premium given to
retailers)
- $0.20 for promotion that we divides as follow : $0.1
for displays & outdoor, $0.05 for TV spots and 0.05 for
magazines
PRO FORMA INCOME STATEMENT
 Crush brand with 10% market share :
315,000,000 x 0.1 = 31,500,000
Total sales
Cost of goods sold
Gross profit [$]
Gross profit [%]
Selling and Delivery
Advertising&Promotion
Gen&admin expenses
Pretax cash profit [$]
Pretax cash profit [%]
Regular (65%) Diet (35%) Regular&Diet
15561000 10143000
25704000
2252250
1323000
3575250
13308750
8820000
22128750
85,53
86,96
86,09
409500
220500
630000
7780500
4189500
11970000
2661750
1433250
4095000
2457000
2976750
5433750
15,79
29,35
21,14
CONCLUSION
 We avoid competition with Coca-Cola & Pepsi : no frontal attack to
make sure Cadbury is a niche marketer.
 We avoid canibalization with Sunkist in positioning the Crush brand
name on the family with children at home segment.
 We increase advertising & promotion expenditures to increase our
market share.