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This is a case in which a succesful company snapple was acquired by quaker and how it came to losses. Major Issues: The major issues in the case can be summarized as follows: 1. Why the Quaker takeover of Snapple failed? Where did they go wrong? 2.
What should Triarc Beverage Group do now? To understand and analyze the issues in the case it is important that we understand the reasons that made Snapple a successful brand at a time when many others failed. For this we need to study the characteristics and strengths of Snapple as a brand and the company as a whole. This will lead to the discovery of reasons as to the failure of Quaker Inc in building the Snapple business and also what Triarc should do so as to regain the supremacy of the brand. Analysis for resolving the issues: It took 15 years to become e an overnight success. W hat m ade Snapple a success w hile m any other prem in fruit drinks stayed small or disappeared?
Snapple was a small company whose origins were based on authenticity and trust in consumers eyes. This was evident in the initial m anti of the com pany 100 % N actual even before the com pany became e Snapple (Unadulterated Food Products, 1972). Snapple became successful by launching innovative products, based on fruit juices and teas, into the beverage market. Initially, Snapple beverages were sold to health-food stores and Snapple became successful by launching innovative products, based on fruit juices and teas, into the beverage market. The reasons for the success of Snapple can be attributed to the following brand characteristics and marketing strategies adopted by the company: X Aggressive distribution and customer loyalty strategy, bolstered by a health and fitness craze prevalent at the time. X Entered the developing iced tea market the at the right time w ith a brew ed, high quality, new age Ready-to-Drink (RTD) tea, which was a pivotal early move.
X The company had an image of fun and irreverence that was supported through the marketing campaign of 100 % natural V no matter how the results were. X Snapple rolled out an advertising cam page centered on a custom er relations, regular people them e. Wendy Kaufm an, became e the face of Snapple on TV and her penchant for answering fan mail on air helped build the com pany's quirky positioning. This helped them connect with the public in general.
For example Snapple relied on their most zealous customers for product and packaging ideas. X Snapple had an extensive and dependable network of independent co-packers and distributors to prepare, bottle, warehouse, and sell its products. 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. With competition in the market fierce, maintaining the product presence in the important cold market has a large dependency on the distributor.
Marketing II Why did the acquisition of Snapple by Quaker fail? Quaker believed that pairing the established Gatorade brand with Snapple would allow Quaker to realize significant synergies. Quaker believed it had the financial resources and leadership experience to market and expand Snapple nationally and internationally. The immediate benefit to Quaker was that the acquisition would instantly establish it as the third leading beverage producer and distributor in the US. The reason for the failure can be attributed to a clash of cultures in which Quaker grossly underestimated the differences between its highly focused, mass market operating style and Snapple's quirky, entrepreneurial and distributor oriented style. Among other things, Quaker systematically dismantled the brand's quirky, off-center image.
They fired Wendy, "the Snapple lady, " gutting a campaign that had helped build the brand and boost market share. Then they stopped advertising on the Rush Limbaugh and Howard Stern radio shows in favor of a more mainstream media approach. No one seemed to know exactly what the Snapple brand stood for any more. By telling the huge network of small distributors how to behave instead of working with them from the start, Quaker destroyed a great deal of the distribution equity that Snapple had taken so long to develop. Even the resizing, offering Snapple in large bottles like Gatorade, turned off consumers who preferred the traditional single-sitting sizes to a daylong jug. There is a vital interplay between the challenge a brand faces and the culture of the corporation that owns it.
When brand and culture fall out of alignment, both brand and corporate owner are likely to suffer. Quaker's corporate temperament was perfectly attuned to the achievement-oriented message of Gatorade. But Snapple was not about accomplishing an objective; it's about adding a little fun to life. Given the difference between the two brand identities, it's no surprise that they didn't both thrive under the same owner. Recommendations: What should Mike Weinstein, CEO of Triarc Beverage Group do? Triarc should make the following changes in strategy to increase sales volume and market share for the Snapple brand: a.
Get back to basics by specifically refocusing on what made the brand successful initially. Bring back the zaniness of the brand, reinstate the Snapple Lady and Howard Stern, and slowly build the profits of the quirky brand. b. Increase TV, radio, and print advertising to create a new buzz for the brand.
c. Sign new celebrity spokespersons to reconnect with consumers. d. Re-focus on the 100 percent natural and M ade from the best stuff on earth brand message. e. Do not change the labeling and bottling of Snapple.
f. Put in place an extensive and dependable network of independent distributors. The company will have to regain the loyalty and trust the brand enjoyed among the distributors earlier. It is imperative that they exploit the inherent strengths of the brand about which people still feel good. This is a proved in the research report. The company should not lose sight of the qualities on which its brand is valued.
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