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Memo
To Mike Ballif
From Group I
Date 11//00
Re Snapple
The primary decision to be made by the executives of Quaker was how to adapt the Snapple brand to the Quaker infrastructure while continuing the growth of Snapple.
There were two alternatives that the executives faced distribution channels and image. It is apparent from Snapple's beginnings that cold channel distribution was effective in terms of sales and reputation. Quaker left this cold channel approach in order to reduce costs of middleman distribution and to increase efficiency by use of existing Quaker distribution systems. However, the cold channel approach proved successful for Snapple and it helped to create a strong brand image.
Snapple's image was that of a high quality, natural and healthy drink. For this reason, it was considered a fashion brand. Quakers mistake was trying to transform this successful fashion brand into a mainstream product. It did so by changing distribution, packaging, and important non-traditional relationships. Quaker relied upon its success with Gatorade as a lifestyle drink to carry over to Snapple, thereby changing its image.
Our recommendation for the folks at Quaker is to maintain Snapple's previous cold channel distribution. A main concentration should be single bottle distribution because it allows a premium price while still appealing to Snapple's core audience of 'fashion' brand drinkers. The previous success of packaging and distribution created a successful niche market for Snapple, which Quaker should develop instead of abandon. While others may enter the market, Snapple is an entrenched product with a strong image and reputation. The warm channel should be more developed in order to increase sales, but without compromising the image or relationships previously created. Quaker could also pursue contracting with schools, vending machine distribution, and other specialized avenues. Our recommendation for image is to continue offbeat advertising, find a memorable spokesperson or run creative ads, and sponsor health conscious events. The goal for Quaker should be to maintain Snapple's current image and to avoid resting on the laurels of Gatorade's success.
The most important issue for these recommendations is obviously the deterioration of Snapple's market share.
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