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Pepper/Seven Up Inc – Squirt Brands
Squirt Brand carbonated drink is a caffeine-free, low sodium soft drink that is a blend of grapefruit juices mixed with carbonation. It is the best selling carbonated grapefruit drink in the United States and marketed under Dr. Pepper/Seven Up Inc, which is owned
by the London based company Cadbury Schweppes, the world’s third largest soft-drink company. Three companies with 90% of the market share control the carbonated soft drink industry in the US, which are Coca-Cola, Pepsi Co, and Dr. Pepper/7Up, also represent the top ten selling brands in the US. The industry is divided into three major participants; concentrate producers, bottlers, and retail outlets. Squirt’s product line, diet, Ruby Red, and Diet Ruby Red account for 20% of Squirt’s total sales which is previous to a positioning review in 1995 by Foote, Cone, and Belding, Squirt focused its advertising on the 18 to 34 year old target market. Squirt advertised through newspapers inserts, cable TV spots, spot radio, and consumer, retail, and trade promotions. Squirt’s promotions exceeded the advertising expenditures. Squirt has been attributed with having the highest brand loyalty amongst competitors even though Mountain Dew was the most heavily advertised. At this time, the positioning of the company was to target Squirt to adults and Ruby Red to teens and young adults. The company was shooting commercials involving Rollerblading and Mountain Biking. Advertising messages emphasized how Squirt was beyond the ordinary taste, but also that it’s incredibly exciting. Throughout the five years, Squirts creative execution and positioning were revisited three times, no changes were made. Five Squirt bottlers account for 50% of sales. These bottlers are located in Los Angeles, Chicago, Detroit, San Diego, and Portland. A total of 100 bottlers account for half of the Squirt case volume with these bottlers located predominantly in the Western U.S., California alone is responsible for 38% of the total case volume produced. Squirt is the primary brand with two brand extensions. These extensions include Diet Squirt and Ruby Red Squirt. These extensions have both been successful and account for 20% of Squirt Sales. Diet Squirt was the first carbonated drink to be sweetened with Nutri-Sweet. Squirt's direct competition comes from two Coca-Cola brands. These are Fresca and Citra. Fresca is a caffeine free diet soft drink targeted to adults over age 30. Citra is sugared caffeine free version of Fresca targeted to teens and young adults. Squirt outsells Citra and Fresca combined by case volume. Squirt's advertising has used a variety of media including newspapers, television, and radio. Overall Squirt spends less on advertising and promotion than its competitors. Squirt also enjoys the highest brand awareness in the carbonated grapefruit drink category. Squirt is currently positioned as a, "spunky, lively, everyday, on the go, sociable, colourful, and music driven" beverage. The target market is adult’s ages 18-34 years old. The current tag line is, "Squirt your thirst." The position has been revisited in 1999 and 2000, however no changes were made. Foot, Cone & Belding made a full review of positioning strategy and made a few recommendations in mid 2001. They concluded that Squirt was more thirst quenching than refreshing, and it was not seen as either hip and young or not so cool and hip. They recommended that Squirt also be targeted to a younger demographic, especially the 18-24
year old range. They reasoned that this age group is a large consumer of soft drinks, and that the "thirst-quenching" attribute of the product would appeal to them. Squirt has also been looking into the growing Hispanic population in the U.S. Squirt is one of the larger selling brands of soda in Mexico, and Squirt has large brand recognition there. According to the Squirt census data the Hispanic population is one of the fastest growing groups in the U.S. Within this group 25% were under the age of 18. Cities such as Los Angeles, El Paso, San Diego, San Jose, and San Antonio are over 25% Hispanic. Experts predict that Hispanics will overtake Blacks as the largest minority in the U.S. The brand Squirt is sold in Mexico with great success by a different company.
1) Does expenditure advertising on retail, trade and consumer promotions help company
product (Squirt Brand) to gain more market share and be more competitive? Should they change their advertising strategy?
2) Does the company need to comply with brands advertising agency, Foot, Cone &
Belding recommendation about Squirt need to be targeted to more younger demographic, especially the 18-24? Give reason to support your answer.
3) Decide to whom in the Hispanic population should Squirt be targeted?