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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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