Cadbury Crush Case Study Essay Example
Cadbury Schweppes is an important player in the American soft drink market where American consumers drink more soft drinks than tap water. In conjunction with population growth and rising per capita consumption there was an estimated $43 billion in retail sales in 1989. However, trend data suggests that sales of diet drinks accounted for a large portion of the overall growth of carbonated drink sales in the 1980’s with supermarket sales the key to successful soft drink marketing.
Despite being the fourth largest soft drink marketer in the United States, 71.4% of the total market was produced by Coca Cola, PepsiCo or Dr. Pepper/7up. However, Cadbury has carved out a niche in the non-cola segment of the soft drink industry where their brands were often the market leader in their specific categories. With their acquisition of Crush in 1989, Cadbury controlled 22% of the orange category of the soft drink market through Crush and Sunkist. The orange category has the third largest share of the market, with a market share of 3.9%.
After purchasing Crush, Cadbury executives needed to restructure the Crush brand to gain a higher market share while neither contradicting its current brand image nor cannibalizing Sunkist soda sales. Restructuring is to occur through revitalizing the bottling network, developing a brand position, and developing a new advertising and promotion program.
Analysis and Evaluation
When Cadbury acquired Crush in 1989 they discovered that Crush was available in markets that represented only 62% of orange category sales due to Proctor & Gamble’s decision to distribute its product through warehouses rather than bottlers. This decision caused many bottlers to look elsewhere for business and lead to a decrease in the number of bottlers that distributed the brand. Looking at Tables 1 and 2 which look at market shares and market coverage of orange carbonated drinks from 1985 to 1989 it is apparent that there is a positive correlation between the two.
Despite being the fourth largest soft drink marketer in the United States, 71.4% of the total market was produced by Coca Cola, PepsiCo or Dr. Pepper/7up. However, Cadbury has carved out a niche in the non-cola segment of the soft drink industry where their brands were often the market leader in their specific categories. With their acquisition of Crush in 1989, Cadbury controlled 22% of the orange category of the soft drink market through Crush and Sunkist. The orange category has the third largest share of the market, with a market share of 3.9%.
After purchasing Crush, Cadbury executives needed to restructure the Crush brand to gain a higher market share while neither contradicting its current brand image nor cannibalizing Sunkist soda sales. Restructuring is to occur through revitalizing the bottling network, developing a brand position, and developing a new advertising and promotion program.
Analysis and Evaluation
When Cadbury acquired Crush in 1989 they discovered that Crush was available in markets that represented only 62% of orange category sales due to Proctor & Gamble’s decision to distribute its product through warehouses rather than bottlers. This decision caused many bottlers to look elsewhere for business and lead to a decrease in the number of bottlers that distributed the brand. Looking at Tables 1 and 2 which look at market shares and market coverage of orange carbonated drinks from 1985 to 1989 it is apparent that there is a positive correlation between the two.