Aware of the brand and the product (36)

Do not have an idea of the brand/product (8)

Our association with Snapple

Somewhat know of the product and the brand (16)

60 students were asked about Snapple and whether they recognized it

 Founded by Hyman Golden, Arnold Greenberg and Leonard Marsh in Valley Stream, NY in 1972. The word "Snapple" was introduced in the early 1980s and is derived from a carbonated apple juice. The Snappy Apple Taste Despite their relatively high price of $1 a bottle, these products enjoyed some success in the New York, Boston, and Washington, D.C., areas in the early 1980s. Line Extensions to fruit drinks were undertaken in 1986. But it was only in 1987 that Snapple struck gold with its cool Iced Tea an essentially summertime drink Subsequently they introduced many flavors and, in the first six months of 1989, the company's revenues from noncarbonated beverages increased by 600 percent.

 The success of the company was predominantly due to its robust network of 300 family owned small distributors who serviced convenience chains, pizza stores, food service vendors, gasoline stations and mom & pop stores. Its quirky advertising campaigns with The Snapple Lady Wendy Kaufman and popular endorsement on shock radio by Howard Stern & Rush Limbaugh made it quite popular and coveted. Snapple Sales grew from $80 mn in 1989 to $231 mn in 1992 & 516 mn in 1993. Its share of the market remained a sturdy 30 40% during this time period In 1994, the company which was running sales of over $674 mn was sold to Quaker Oats for $1.7 bn through Thomas Lee & Co. (leveraged buyout & IPO)

Some of its exciting flavors

Lemon Tea

Kiwi Strawberry

Mango Madness

Peach Tea

Pink Lemonade

Diet Peach Tea

Fruit Punch

Raspberry Tea

Diet Lemon Tea

Quaker in 1994 was a food company with the areas of business listed under:
Quaker

Grain - based foods

Bean-based foods

Beverages

Pet Foods

The foods ventures were relatively mature, while the Beverages category was a growth entity. Gatorade, another acquisition by Quaker, contributed $ 1.1 billion of the companys turnover in 1994.

Gatorades origin was in a research project conducted at the University of Florida. The product replenished body fluids lost during exercise. Quaker acquired the brand and took its sales to $ 1 billion in the course of a decade. The fantastic growth achieved was attributed to factors like line expansion (new variants and pack quantity introduced), promotion (visibility in the major sports leagues) and improvements in distribution. Thus Gatorade was a major asset and caused Quaker to be a constant target for acquisitions by virtue of its existence in Quakers repertoire.

How Snapple fitted into Quakers plans The idea was to strengthen Quakers position in the beverage business.

An innovative distribution system combining the best of both companies for optimal results through more merchandising, more points of sale, more instore refrigeration equipment. Snapple to benefit from Quakers packaging experience, supply chain expertise and modern information system capabilities.
Snapple would benefit from Quakers direct connections between factory and supermarket while Gatorade would benefit by virtue of Snapples middlemen who would then take Gatorade to the cold channels which it previously failed to penetrate.

What went wrong with Quaker Acquisition

The Quaker management felt confident about Snapple because they had already achieved an astounding success with the sports drink Gatorade. However, in terms of brand identity the two drinks couldnt have been further apart. Gatorade was about sports and a highenergy, athletic image. Snapple, on the other hand, had always been promoted as a New Agey and fashionable alternative to standard soft drink brands.

Although Quaker executives realized that Snapples imagery was different from Gatorades, they did not fully understand how deep the original imagery of Snapple was entrenched in the minds of the consumers.

Quaker decided to promote the product, abandoning eccentric advertising campaigns in favour of a more conservative approach. Wendy Kaufman, Howard Stern & Rush Limbaugh were discontinued which resulted in negative publicity. (Crapple) The distributor channel rationalization did not go as planned. The distributors had worked for years to get into blue-chip supermarket accounts and were unwilling to cede Snapples supermarket accounts to Quaker in exchange for the right to distribute Gatorade to the rest of their accounts. Quaker made a mistake in introducing Snapple in large pack sizes as Snapple sold best in 16 ounce single serve containers which were used for immediate consumption. The large packs also met limitations on distributor trucks, retail display space in the cold channels etc. They could not identify that one big differentiator that would move Snapple from fashion water to an established brand.

Gaps Model Applied to Quakers handling of Snapple

Gap 1: Not knowing what customers expect
a) Insufficient marketing research No logic behind adoption of large pack sizes. This strategy seemed to originate from a hangover of strategizing for Gatorade for which large pack sizes were appropriate due to the utilitarian nature of the product. Proper Marketing research would have revealed that a high percentage of purchases includes single serve bottles for immediate consumption. b) Focus on new customers than old ones Although this was a peripheral factor, the fact was that by incorporating a transition in Snapple from edgy to mainstream, Quaker was essentially losing touch with the consumers who had given cult status to Snapple in its original avatar. These were the same consumers who identified with Wendy and Snapple as a whole.

Gap 3: Not delivering to service designs and standards a) Failure to smooth peaks and valleys of demand Absence of preferred flavor variants at all stores.

b) Customers who do not fulfill roles Customers who negatively affect each other. This is evident in fashionability and negative social pressure. For example, consumers who say that Snapple is no longer avant-garde and lead others to switch to newer brands.

Snapple Who

100% natural - Real people and real situations Experiential Factor Essentially sensual, tickles, rouses, lingers, wakes up the mouth Small break from the mundane everyday life Brand Personality Fun irreverent, playful, informal Creative variety Brand Associations Wendy eccentric, a nobody now a celebrity, fun, genuine, personal Whimsical and creative

 Snapple is defined by what it is not Colas Unnatural Artificial image Impersonal Uniformity Mass production Authority Snapple Natural Real Personal Diversity Variety, individualism Anti authority

Lies in the middle Its not cola, its not as serious as a health beverage

The alternative beverage category represents 10% of the non-alcoholic beverage industry

On March 1997, Snapple was acquired by Triarc for $300 million, an investment company with a long history of buying and selling troubled assets. Triarc had built a portfolio of Juice and soda brands such as Royal Crown and Mistic In contrast to Quakers professional culture, Triarc had a fun-filled culture which in fact helped Triarc executives understand and embody the quirky spirit of the Snapple brand thus making it possible for them to get behind the brand and turn it around.

Triarc plan was to limit the cost of failure. Instead of making big changes and bringing in big schemes, they made little changes and watched what works and what does not. Therefore, the company experimented new product launches as they were cost free. The company could come up with a new concept for $50,000 to $75,000 investment plus working capital for ingredients. Distributors bought 200,000 cases of any new Snapple product because people were interested in trying their latest thing.

While the alternate beverage market was growing, Snapple was not doing well. So it clearly needed brand revitalization. Brand revitalization was done majorly through the two performance enhancement strategies: 1. Growing the volume of sales Entering new segments in the current markets. ELEMENTS 2. Repositioning Real repositioning: Upgrading the product by adding features, variants etc. Psychological repositioning: Changing peoples perception.

The company understood that the brand needed revitalization.

Wendy was not only rehired but her picture was also wrapped around the bottle. Took great insights from the report from deutsch, Inc.

And thus was born Wendys tropical inspiration.

The product till 1993 was still in its growth stage when it was not acquired by Quaker. Considering that the brand was still not in its saturation and had a long time to witness decline, changing its image under Quaker and taking out Wendy from its communication was a branding sin. Triarc took it up from where Snapple as an entity had left it in 1993 and attempts were made to reinstate the same fun filled identity of Snapple in peoples minds.

In fact, the give it a go approach that Triarc followed had an unstructured planning and execution where analysis and risk estimation were preceded by fast decisions, quick movements in order to get early success. Triarc soon launched Snapple extension called elements, a range of teas with flavour names like Sun, Rain and Fire.

Within a short period it sales had grown to 15% of Snapples total sales.

32 & 64 ounce bottles were discontinued.

Re-establish distributor relationship by proclaiming the magic is back. A meeting of distributors took place and promises were made to the distributors by well trained senior executives of Triarc.

The distributors were convinced and they responded positively by accepting to take a little more Snapple.

Abhijit Kumar Abir Banerjee Bikash Jyoti Borah Chirmi Krishna Priyanka Agarwal Shefali Arora Vaibhav Nahar