Cadbury Case analysis

Case: Cadbury Beverages, Inc.
1. Situation Analysis
- Industry o $43 billion in retail sales for soft drinks in 1989 o 82% of soft drink sales are led by 3 producers: Coke, PepsiCo, Dr. Pepper/Seven Up
 Supermarkets account for 40% of industry sales o Orange Category (diet & regular) accounts for about 3.9% of soft drink sales
 Top 4 ‘orange’ brands: Sunkist, Slice, Minute Maid, Crush
- Company: Cadbury o 1989, $4.6 billion in worldwide sales
 beverages accounted for 60% ($2.76 Billion) o 3.4% soft drink market share o 3rd largest soft drink marketer behind Coke & PepsiCo o Sunkist available in markets representing 91% of orange sales; Crush available in 62% o 16% of advertising for top 4 orange brands spent by Sunkist & Crush
- Trends o Lost the battle of Market share between 1986-1989
 With intro of Slice and Minute Maid in 1986, market shares for Sunkist and Crush decreased by 12% and 4% respectively; 1987-> Decrease of 7% and 4% respectively; 1988 & 1989 Crush had a 3% decrease each year o Sunkist & Crush had an overall decrease in advertising expenditures between 1985 and 1989 (68% and 58% respectively) while Minute Maid increased ad expenditures from $174K to over $10.4 million within the same time frame
 Slice had an overall decrease of ad expenditures, but still had more allocated in 1989 than Minute Maid
2. Problem
- Crush must reposition itself in order to gain a greater market share among the orange category of soft drinks.

3. Alternatives
- Alternative A: Spend more on advertising and promotion of Orange Crush using more advertising vehicles (network tv, cable tv, etc…) o Advantages
 More exposure and availability markets that represent the orange category
 Extend to target audiences in the ‘Young Adult’ (18-34) Category o Disadvantage
 Cannibalization of Sunkist
 Decrease in customer loyalty from original target consumer (13-29)
- Alternative B: More emphasis on Diet Crush with respect to regular Crush
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