Cadbury Beverages, Inc.: Crush Brand

Cadbury Beverages, Inc.: Crush Brand

To: Professor Brown

From: Rasneek Kochhar, John Kane, Jennifer Zhu, Katherynne Teos

Date: April, 5, 2015

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Overview

Cadbury Schweppes PLC is one of the world’s largest soft drink marketers, behind Coca-Cola and Pepsi. In 1989, Cadbury Schweppes acquired Crush brand from Proctor and Gamble with goals of re-launching the Crush brand by targeting the main issues that have been detrimental to Crush in the orange soft drink market. Due to increase in competition in the past years (i.e., Mandarin Orange Slice and Minute Maid Orange), Crush’s market share has decreased. The main goal Crush has now is repositioning Crush without hurting it’s brand equity or cannibalizing Sunkist soda sales, which together with Crush controls 22% of the orange - soft drink market. The three main issues to focus on is (1) reestablishing better relations with bottlers, (2) repositioning Orange Crush, and (3) developing a program to increase advertising and expenditures.

1. Recommendation for Positioning Orange Crush

We recommend that Crush shift their target market to a slightly older audience of 18-29. Crush’s target market is currently aged 13-29, with a purchaser household size of 3-5 children. Sunkist’s target segment is teens aged 12-24 with a purchaser household size of 3-5 children as well. Note how the segment sizes are fairly similar. It is evident that Crush’s sales negatively impact and cannibalize Sunkist’s sales due to similar age segments. By focusing on an older segment, not only is Crush likely to decrease the cannibalization of Sunkist sales, Crush is also able to appeal to a pronounced segment of consumers over 25 years of age whom are more susceptible to drinking diet soft drinks. Because consumers over 25 are typically more health conscious, we can directly target these older consumers to promote the more natural orange taste of Crush. Not only will that help our repositioning, having an older market segment will aid in increasing our diet sales, which has a higher profit margin than regular soda. The perks of having an older market segment includes (1) higher profit/sales on diet soft drinks, (2) decreasing cannibalization of Sunkist sales, and (3) higher brand loyalty due to an older target market.

We also recommend investing a significant amount of money on advertising. In 1989, Crush expended a rough 9 million dollars less than the leading orange carbonated soft drink brand. Though there is already high brand awareness present with the company, a variety of mediums and channels to advertise our new positioning to our adjusted target audience is vital. According to industry research, soft drink purchasers respond favorably to price promotions and in-store displays. We want to focus on end of aisle displays better known as a form of push strategy, because it is estimated that a brand is “locked out of 60 percent of the [supermarket soft drink] volume if it can’t get end-aisle displays.”