Your Assessment of the Soft Drink Industry

CADBURY BEVERAGES, INC.: CRUSH BRAND

1. Based on your assessment of the soft drink industry, the orange-flavored category, and the competitive situation of Cadbury Beverages and orange Crush, what is your recommendation for positioning orange Crush? Be sure to base your recommendation on facts and issues raised in the case.

Cadbury Beverages, Inc. already markets Sunkist Orange Soda and Diet Orange Soda. It is necessary to have a clear distinction between both the Sunkist and Crush Orange beverages in the marketplace. According to Exhibit 8 in the text, Sunkist and Crush target about the same market, which is teens aged 12-24 and 12-29, respectively. To reduce concerns of cannibalization, we believe Sunkist should continue to market towards children and teens. The name itself implies that teenagers would be the primary targets for this beverage as it relates to teens on the beach and drinking in the sun. Looking at Exhibit 6 in the text, you can see that Sunkist sales volume for their regular drink as opposed to their diet drink far outweigh one another. About 82 percent of its case volume sales being the regular form rather than the diet form. This can indicate that children and teenagers aren’t necessarily looking to drink a diet product. As for Orange Crush, 70 percent of sales were regular soft drinks, and 28.7 percent accounted for their diet soft drink. This being the case, our recommendation for positioning Orange Crush would focus on targeting young adults ages 18-34. This would narrow the range that they target towards, allowing Sunkist to cover the younger demographic which in turn would help to reduce cannibalization and help raise their market share which has been dramatically declining over the past five years. For example, Exhibit 5 shows in 1985 Sunkist and Crush dominated the orange carbonated soft drink brand. Once the two competitors (Pepsi Mandarin Orange Slice and Coca Cola Minute Maid Orange) stepped in the market, their market shares decreased leaving Crush behind (8% market share) in 1989. Targeting towards 18-34 would also be good for the Crush diet product being that diet beverage consumption is more pronounced among consumers of 25 years of age and older and has a higher gross profit margin than regular orange beverages. 2. Based on your analysis, what objectives should be set for the Crush advertising and promotion program? What strategy(s) should be pursued? The first move for Crush should be to recruit more bottlers and have them establish a push strategy through retail outlets and local consumer promotions enabling their orange beverages to be more accessible to a larger number of people. If your product isn’t available, people cannot buy it. The case notes that supermarkets account for 40% of sales in the soft drink category, which will provide an ample amount of opportunity to generate revenue through in-store promotions. This would allow the bottlers to develop long-term