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Executive Summary

During 1987 – 1993, Snapple was one of the successful brands of a variety of non-carbonated

beverages that targeted mainly towards the young, health conscious consumers. Snapple provided

many varieties of flavour to its consumers and placed them in different market segments which

were mainly cold channel distributions. With a premium pricing strategy, it had price as an

indicator of quality and was consistent with its positioning strategy. The success of its marketing

strategies were able to enhance consumers brand awareness, brand recognition and brand recall.

Subsequently, Snapple was sold to Quaker Oat in 1994 for $1.7 billion, the sale was in decline.

Quaker made mismanagement in financial, marketing strategies. Accompanied with ineffective

advertising and marketing programs, lost in trust in distributors and increase in competition in the

market, were among the reasons for the brand’s decline. In 1997, Quaker decided to sell the

Snapple to Triarc for $300 million.

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TABLE OF CONTENTS PAGE NO.

Executive Summary 1

1. Synopsis of Snapple 3

2. The Rise of Snapple – 1972 to 1993

2.1 The 4Ps: Product 4

2.1 The 4Ps: Price 4

2.1 The 4Ps: Promotion & Communication 5

3. The 4Ps: Place 6

4. The Fall of Snapple – 1994 to 1997

4.1 SWOT Analysis: Internal Factors 7

4.2 SWOT Analysis: External Factors 8

5. Lessons Learnt from Quaker – 1998 9-10

6. Recommendations 11-12

6. Conclusion 13

List of references 14-15

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1. Synopsis of Snapple

In 1972, Snapple was created which was formally known as Unadulterated Food Production. The

initial product offered was solely apple soda, which was named Snapple. It targeted at the young,

health conscious market segment. Subsequently, the company became more successful, a variety of

non-carbonated beverages were then introduced and it began expanding its distribution. In 1994, the

company was sold to Quaker Oats for $1.7 billion. However, Quaker was unsuccessful in building

Snapple’s brand value as evidenced by the decline in sales (Appendix 1). Later in 1997, Quaker sold

the Snapple to Triarc Beverages for $300 million.

Triarc’s new strategy for Snapple is to rebuild and develop new communication to revitalize the brand.

Identifing the nature of the brand is done to “reconnect” the brand with consumers to achieve both

loyalty and future success.

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2. The Rise of Snapple – 1972 to 1993

2.1 The 4Ps: Product

With many brands being available in the Alternative Beverage category market by Snapple’s

competitors, it was vital that Snapple had a product plan in the progressively competitive beverage

industry. To increase brand equity, Snapple focused mainly on brand recognition and brand image;

employing the Consumer-Based Brand Equity Framework. Broadening its product line to provide a

variety of flavours to its consumers was one of Snapple’s marketing strategies. Extending the product

line with an established brand name to enter different market segments, a reduction in introductory

marketing expenses and high prospects of success will be achieved.

In addition, Snapple provided experiential benefits to its consumers through Snapple’s full and exotic

tastes. Therefore Snapple brand is synonymous with the brand image of natural, fun and quirky, in the

eyes of consumers.

2.2 The 4Ps: Price

A premium pricing strategy was employed as Snapple targeted at the niche, premium beverage market.

It had price as an indicator of quality and is consistent with its positioning strategy (Andre & Granger,

1966). Although not all products succeed, the loyalty of customers assisted Snapple in driving market

share in targeted market.

.

To further promote positive marketing strategies, Snapple should constantly review its pricing strategy

against competitors and also reviewed consumers’ perception of value. Solely relying in its brand

would be detrimental.

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2.3 The 4Ps: Promotions & Communication

A free source of communication was achieved through the success of the entrepreneurial founders that

led Snapple being reported by several medias, many times. This helped to enhance consumers’ brand

awareness, through the increased in brand recognition and brand recall (Keller & Lane, 2003). This

resulted in an overall increase in Snapple’s brand equity.

Beside that, secondary associations were also engaged. Wendy was employed as the spokesmodel.

Wendy possessed some personality attribute associations and product-related associations that were

linked to the Snapple’s brand, which reinforced Snapple’s “quirky” positioning.

Snapple also enlisted the support of offbeat personalities, including Howard and Rush to create a

quirky, individualist image that assisted Snapple in achieving a cult-like status, which is a strong and

unique marketing strategy (Business Week, 2004).

Reinforcement of Snapple’s brand image and brand’s mantra: “100% Natural” can be seen through the

use of natural and real communication means. This assisted Snapple in creating a consistent brand.

Additionally, Snapple recognized importance of having its spokesperson in understanding the meaning

of the Snapple brand.

Snapple Convention aided Snapple in being interactive with consumers, allowing consumers to

“remember” Snapple, and tries to form a positive brand image through creating strong, favorable and

unique associations to the brand.

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2.4 The 4Ps: Place

As one of their marketing strategies, Snapple focused on the method of distribution of its beverages.

Indirect channel distribution marketing strategy was exploited, that made the distributors having an

important role to play on the impact on Snapple’s brand equity (Robert & Shelby, 1994). This can be

affected through the store image portrayed and also the display of Snapple’s beverages in stores.

Snapple recognized this fact and thus built a strong relationship with its independent distributors.

Initially Snapple had a very little supermarket coverage. It identified that distribution in supermarket

would lead to a decrease in own profit margin. Instead, it flowed through small distributors that were

small as individual distributors were but became a mighty marketing force when aggregated. One of

the mainstays to Snapple’s success was in an aggressive distribution. Snapple had an extensive and

dependable network of independent distributors. Not only did these distributors generate high margins

carrying Snapple, they also had the option of delivering other beverages to chain stores, further

boosting profitability. Maintaining a strong relationship with distributors through commitment and

trust, Snapple earned tremendous operational loyalty (Robert & Shelby, 1994).

Snapple also undertook the opportunity to increase its distribution volume significantly by investing in

coolers and vending machines for convenience stores that differentiated itself on the basis of superior

convenience and accessibility.

In conclusion, Snapple managed its brand through the use of and the coordination of a full repertoire of

marketing activities to build its equity. Consequently, Snapple flourished and outshined its competitors.

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3. The Fall of Snapple – 1993 to 1997

SWOT Analysis

SWOT analysis is used to evaluate the failure of Snapple and Quaker’s management performance. The

aim of SWOT analysis is to identify the key internal and external factors in the market environment in

achieving the underlying business objectives and goals.

3.1 Internal Factors:

Strength is the competitive advantages and attributes which helps to differentiate companies from

competitors, in meeting the target market demand. Quaker is experienced in managing its products and

also building strong brand images. Since it had the resources and management skills, it was foreseen to

be able to benefit Snapple brand. Moreover, the wide range of flavours tends to reinforce Snapple’s

individualism characteristic, which was a clear point of difference. Snapple also possessed a strong

heritage of providing authentic, natural juices. However, past performance offers no guarantee of

future success and even well-established brands need to work to sustain their position.

Weakness relates to the limitation and restraint in decision making to achieve the objectives. Gatorade

and Snapple had different brand images: lifestyle and fashion, respectively, which created confusion to

the consumers as the brand portfolio was not properly managed. Brand values and meaning are related

to consumers’ perception of belonging and loyalty of the brand (Quester, 2006). Yet, Snapple had

difficulty in differentiating its product from “fashion water”. It lacked compelling reason for use.

Mainly due to the discontinuance of Wendy and Stern, brand loyalty was lost which impacted

Snapple’s financial performance (Leiser, 2004).

The failure of large pack of Snapple drinks illustrated Quaker’s low understanding and lack of

consumers’ and distributors’ communication. Moreover, the failure of distributing a wide range of

flavours affected consumers’ repurchasing behaviour (Andreu, 2006).

The main weakness of Quaker was the failure of Snapple’s brand consistency and the transformation of

its brand. The lack of understanding of brand also led to wrong implementation of marketing tactics.

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3.2 External factors:

Opportunity is the supportive marketing environments which assist organizations in achieving their

objectives. Snapple’s early entry to health conscious beverage market involved little competition which

helped to establish its well-known brand.

Consumers’ buying decision involves recognition of problems or product needs, subsequently

searching for product information, valuation of alternatives, purchase and then post purchase

evaluation (Pride, 2006). In the information search process, the external factor of decision is affected

by friends or outside resources (Pride, 2006). Being perceived as “fashion water”, Snapple’s youth

market is seen to be more easily influenced by peers. Furthermore, as Snapple had a strong heritage of

providing natural, authentic juices, it had well established its brand image and also gained a group of

loyal customers, which would pave a path to maintain and develop future growth of Snapple.

Threat is the barrier that prevents organizations in achieving their objectives. Snapple’s rumors had an

impact on brand image, consumers’ brand loyalty and brand equity. The quality, design, features, cost

and prices are the considerations for consumers purchasing decisions. Price of a product is based on the

consumers’ perception of the value (Leiser, 2004). Due to the success of Snapple, increase in

competition was seen and consumers became more price conscious. Consumers will switch for the

lower price product when there is no large differentiation between the products (Thavaraj, 1976). The

youth market, with a lower disposable income, may thus be lost.

Furthermore, Snapple should aim to deliver to the ever-changing market’s demand, as "experience"

will be a key word for the beverages brand architecture and the consumer-focused development in the

future market place (Ellia, 2006).

In conclusion, the failure of Snapple lies both within the brand and the bad management by Quaker.

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4. Lessons Learnt from Quaker - 1998

It is vital for all organizations, including Triarc to learn from past experience, reviewing the success

and failures of Snapple. Continuous improvements and reviewing of past experience would aid Triarc

in gaining an edge (David, 1993).

Recognizing the failure of Snapple from 1994 to 1997, Triarc should understand that mere relying on

the past success of a product and brand is detrimental to the organization’s health. It is almost

impossible for a brand to continue flourish, without reassessing it, especially when the market is

saturated and consumers’ perception and behaviour continue to change. Introduction of new flavours to

the market should be done only after having an in-dept consumer research. Investigating on what

beverage market actually requires and what is lacking in both the product and the market is essential in

successful innovation. Hence, Triarc is encouraged to understand and continuously reassess the

meaning of the brand and customer desire or trends.

Engaging brand management teams that have the required knowledge and understanding of Snapple is

one of the essential element in managing own brand equity. Moreover, good communication and

establishing and maintaining a strong, favourable relationship with the distributors would assist Triarc

in achieving an increase in market share, expansion of its current market, which would ultimately lead

to an increase in value of Snapple. However, Quaker failed to recognize this and led to Snapple’s

independent-minded distributors to mistrust Quaker management.

Quaker overestimated Snapple’s value and tried to compete with “large” brands like Coca-Cola and

Pepsi. They made advertising miscues that led to detrimental marketing mistakes. Furthermore,

discontinuation of Wendy and Stern was one of the main failures of Snapple (Tajirian 2003), which

changed the image of Snapple.

Triarc, which is known for acquisition of troubled assets, should be aware that consumers have

changed their purchase habits and further consumers’ behaviour is evolving at a rapid pace. In order to

be successful in a certain industry, investigation of consumers’ demand and behaviour has to be

executed on a regular basis. Likewise, responding to the market’s needs accordingly is crucial, rather

than innovate for the sake of innovation or rest on their laurels and expect a product or brand to

continue to be successful based on its history.

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Triarc also recognized that in order for a product or brand to continue achievement, a new brand image

that should be consistent with Snapple’s brand should be established. Maintaining a good culture of the

brand as well as employing effective marketing strategies would ultimately lead to Snapple being

positioned in consumer’s consideration or evoked set.

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5. Recommendations

Triarc needs to understand the product differentiation of its new product, Snapple, from its competitors

and employ strategies to heavily market the brand values of Snapple without being stuck in its past era.

To elaborate, innovation is required for Triarc to sustain with the increasing and changing consumer

demands without detracting from its core product business and ensure that consumers are well

informed about its product.

Regardless of the types of innovations employed, the marketing strategy should always focus on its

core brand value so that consumers will be able to recognize any product or campaign as a Snapple

product. This ensures Snapple in properly balancing consistency and change with the brand.

Building brand equity requires firms to recognize and understand the needs of their consumers. In

addition, Triarc has to be able to foresee and adapt to the ever-changing consumer’s needs. Both

qualitative and quantitative researches should be engaged, in order to gain an in-dept understanding of

consumers’ behaviour. Brand tracking to establish consumers’ understanding of Snapple, their

responses to competitor beverages, to establish consumers’ wants and needs and to establish Snapple’s

key demographic and target market, as well as cost benefit analysis because it would be helpful if they

could reasonably estimate the probable benefits to determine whatever they are worth to cost involved

(Hartley 1998). Quantitative research that measures brand awareness and brand image should be

collaborated as they tend to be complimentary. However, the down-side of utilizing both researches is

that it involves significant amount of time and money.

Extension of distribution channels to reach to vast consumers is recommended, since most of the sales

are generated through cold channels. This would thus result in raising brand awareness. Vending into

overseas market should be considered, when Snapple’s brand image has been reinstated. Hence,

building a strong connection and relationship with distributors is vital to organizations especially for

those that require indirect distribution channels.

Fostering a strong and loyal community within the organization would ultimately enhance own brand

equity. This can be done through building a strong welfare, which would help employees to have a

sense of belonging to the organization that would assist Snapple in earning tremendous internal and

operational loyalty.

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Though indirect distribution channel is employed, Triarc should always seek for means to interact with

its consumers, through organizing events and sponsorship. Providing more information about Snapple

product to consumers on its website is also recommended, in order to increase Snapple’s brand

awareness and brand image.

Another recommendation to Triarc should be to reinstate Wendy and Stern due to their association

being established with Snapple. This would then assist Snapple in transforming the negative

association it possessed in the 1990’s and also reinstate Snapple’s brand image.

Although various recommendations are available for Triarc, the organization should always beware of

the advantages and disadvantages of each marketing strategy employed and are able to transform the

negative associations into positive associations, in order to enhance the firm’s overall value.

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6. Conclusion

SWOT analysis is evaluated and it identified the key internal (strength and weakness) and external

factors (opportunity and threat) of Snapple’s and Quaker’s failure in market environment.

Snapple and Quaker have competitive advantages to be differentiated from competitors in

achieving success. However, the weakness of Snapple and Quaker’s different brand images

affected its brand consistency.

Opportunities were available in the market for Snapple’s growth in market share and also

stabilisation of its brand image in consumer buying decision process. Price is one of the barriers

for Snapple due to the increase competitions and price conscious consumers.

After SWOT is being analysed, it identified that there is a need for reassessing and improvement

in their marketing strategies in order to be success.

To be able to manage Snapple, Triarc is required to understand the product differentiation of Snapple

from its own product and its competitors and employ strategies to heavily market the brand values of

Snapple. The marketing strategy should always focus on its core brand value. Both qualitative and

quantitative consumer researches, and brand tracking should be engaged to enhance the understanding

of their product and consumers’ requirements.

Extension of distribution channels, building a strong connection and relationship with distributors,

vending into overseas market, fostering a strong and loyal community within the organization,

reinstating Wendy and Stern are recommended.

However, Triarc should always beware of the advantages and disadvantages of each marketing strategy

employed and to be able to transform the negative associations into positive associations, in order to

enhance the firm’s overall value.

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