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Background

Company Profile. Cadbury Schweppes Public Limited Company (PLC) is one of the oldest and largest

family-run businesses in the world today. Although confectioner Cadbury Limited merged with the

carbonated drinks company Schweppes Limited in 1969, Cadbury Schweppes is still run by members of

the Cadbury family, which has been represented in Cadbury’s top management for more than 170 years.

The company is currently one of the world’s leading producers of chocolate candy and soft drinks.

Cadbury Schweppes PLC managed its beverage operations in North America through Cadbury Beverages

North America (CBNA). Under CBNA are several divisions assigned to handle the operations of each brand,

namely: Crush, Sunkist, Schweppes, Canada Dry, Hires, and Mott’s. Each division has been given the free

hand to manage its own operations and compete freely in the market.

The Adult Soft Drink Business. Of the six divisions of CBNA, Schweppes and Canada Dry are classified as

adult soft drinks. Adult soft drinks are referred to as beverages that are commonly used as an alcohol

mixer or consumed as general soft drinks. Examples of adult soft drinks include: ginger ale, club soda,

tonic water, bitter lemon, and sweetened sparkling waters, among others. Although Schweppes and

Canada Dry were part of the leading brands under this category, it was noted that in 1991, the collective

sales of small brands consume a large portion of the market.

From 1965 to 1990, a study on liquid market trends in the United States showed that the consumption of

soft drinks in general continued to increase, notwithstanding its competition with other hot and cold

beverages in terms of market share. However, given its image and use a mixer, adult soft drinks are

packaged in 1-liter polyethylene bottles rather than 12-ounce cans and 2-liter bottles which were popular

packages for all other soft drinks.

Manufacturing of Schweppes Adult Soft Drinks. Since colas (Coca-Cola or Pepsi Co) dominate the US

market, major bottlers had exclusive agreements with either companies, making it as their primary
product line. With this agreement, bottlers are also responsible for the marketing of other products of

which their partner company carries. Once established, bottlers look for non-competing products to

widen their product assortment, and these includes: ginger ale, tonic water, and bottled water, among

others.

Given that major players in the cola industry have no own brands of adult soft drinks, Schweppes and

Canada Dry complemented the general soft drinks of the cola and lemon-lime giants. The product line of

a large or medium-sized bottler would consist of either Schweppes or Canada Dry.

Distribution of Adult Soft Drinks. Given that cola giants dominate the primary display space, adult soft

drinks, most of the time had to compete to have adequate space. Display space refer to space allocated

to a certain product that also plays an important role to boost sales. Since Schweppes and Canada Dry are

non-competing in nature, the task of obtaining adequate shelf space is less difficult.

Schweppes’s Ginger Ale Product Line. Ginger ale is primarily composed of carbonated water, sugar, syrup,

and ginger flavor. Similar with Canada Dry, Ginger ale offers the market both regular and diet varieties.

Though it is generally classified as an adult soft drink, Schweppe’s ginger ale is more widely used as a

general soft drink rather than a mixer, especially in the northeast part of the United States of America. In

the West, however, ginger ale is commonly used as a mixer with alcohol. As a result, marketing of ginger

ale is heavily concentrated in the northeast, placing second to Canada Dry who controls 33.5 percent of

the U.S. ginger ale market, and ahead of Seagrams who only have 3.1 percent share of the market.

Consumer Image of Ginger Ale. Although more commonly consumed as a soft drink, ginger ale are most

of the time branded as a mixer to alcohol. Studies have shown that even those who consume it as a general

soft drink primarily associate ginger ale as a mixer rather than as a general soft drink. Perception

(promoted as mixer) and packaging (being commonly distributed in 1-liter PET bottles) are considered to

be the main contributors for its current image.


Schweppes Raspberry Ginger Ale. In May 1988, the idea of marketing a raspberry-flavored ginger ale was

first conceptualized as a general soft drink for all occasions. Done with the product development phase,

Sam Johnson, Associate Product Manager of Schweppes under CBNA, was up to the assignment of

convincing the management to proceed with the manufacturing of the product without having a negative

impact on the performance of existing ginger ale products in the market. SRGA was launched nationally

in the US in 1991.

Viewpoint

Sam Johnson, Product Director and Associate Product Manager of Schweppes under Cadbury Beverages

North America

Time Context

Take off point of the analysis is set after the 1st half of 1991

Statement of the Problem

How to balance the potential growth/success of Schweppes Raspberry Ginger Ale, as a new entrant,

without sacrificing Schweppes’s own ginger ale business.

Objectives of the Study

1. To be able to reinforce the image of Schweppes Ginger Ale (of any variant) as a general soft drink

among its target consumers

2. To be the preferred product of target retailers in terms of product distribution in the market

3. To be the preferred product of the consumers both as a general soft drink and as mixer in order

to maximize potential earnings that will benefit the suppliers and investors

4. To analyze the impact of SRGA to other existing CBNA products


Criteria of Objectives

Objective Weights Reason for Weight Given

1 50% Considered as the most critical

factor/ as a pre-requisite to

achieving the succeeding

objectives of the study

2 20% To gain confidence of the

retailers is also considered an

important factor in attaining

business success

3 20% To be recognized by target

consumers should also be

treated of equal importance

4 10% To ensure that the performance

of SRGA would not affect the

performance of other CBNA

products in a negative way

Areas of Consideration

Marketing Strategy Segmentation for SRGA Geographic Segmentation

- Introduced nationally in

the US

Demographic Segmentation
- Targeted to appeal all

group of people

- Diffused preference

Positioning  Manufactured by one of

the oldest and largest

British owned

confectionary and soft

drinks company

 Positioned as either a

general soft drink or an

alcohol mixer

 SRGA targeted to be

consumed as more of a

general soft drink rather

than as a mixer

Target All class and age of people in the

United States

Marketing Mix Product Raspberry Ginger Ale

Price $10 per 192-ounce case

Promotion $1M spent on introductory

promotions

Place United States


Overall Analysis Internal Analysis Strengths

- Established brand name

- Less competition

- Unique selling

proposition

Weaknesses

- Brand awareness

- Current position in the

market

- Weak brand image

External Analysis Opportunities

- Offered to all classes

and ages

- Increasing consumption

of soft drinks as against

other existing hot and

cold beverages

- Dual purpose (as

general soft drink or as

mixer)

- Offered varieties

(regular and diet)

Threats
- Competition among

other types of

beverages

- Bottling agreement with

leading companies

- Distribution channel

- Shift in buyer’s needs

and tastes away from

the product

Strategic Alternatives

A. Management Action Matrix

Objective Management Action Management Action Management Action

1 2 3

1 Devise strategies on a Revisit packaging Optimize available

more creative brand process promotion mix

image for ginger ale

as a general soft drink

2 Maintain good Benchmark on Revisit existing

relationship with existing trends marketing mix

existing and strategy

prospective retailers
3 Continue conduct of Bank of effective Continuously monitor

studies to improve communication product demand vs.

the product strategies trends in consumer

buying behavior

4 Benchmark on Continuously monitor Consider feedbacks

existing trends updates/reports on received from

sales customers

B. Alternative Courses of Action

 Devise strategies on a more creative brand image for ginger ale (of any variant) as a

general soft drink

 Create/review existing agreements (with partner companies/retailers) and look for

potential factors for improvement on reasonable terms and for loyalty purposes

 Bank on effective communication strategies

 Continuously monitor updates/reports on sales

C. Decision Matrix - Scoring

Objective ACA 1 ACA 2 ACA 3 ACA 4

1 4 4 4 3

2 3 4 3 4

3 4 3 4 4

4 2 3 2 4

With a score of “4” being the highest and “1” being the lowest
Analysis and Conclusion

A. Alternative Courses of Action Matrix

Objective Weights ACA 1 ACA 2 ACA 3 ACA 4

1 50% 4*0.50=2.0 4*0.50=2.0 4*0.50=2.0 3*0.50=1.5

2 20% 3*0.20=0.6 4*0.20=0.8 3*0.20=0.6 4*0.20=0.8

3 20% 4*0.20=0.8 3*0.20=0.6 4*0.20=0.8 4*0.20=0.8

4 10% 2*0.10=0.2 3*0.10=0.3 2*0.10=0.2 4*0.10=0.4

TOTAL 100% 3.6 3.7 3.6 3.5

With a score of “4” being the highest and “1” being the lowest

B. Conclusion

The table above shows that the percentage weights used measures the effectiveness of the

solutions provided. Considerable weight was given to review existing marketing mix strategies

of the company and look for potential areas for improvement in order to make the current

strategies operate as a total system.

Recommendation to Management

Given the impact of SRGA during the first half of 1991, the Management should focus its attention

in finding effective ways to manage and improve its existing channels of distribution. To do such, existing

agreements/arrangements much be revisited and identify potential areas for improvement. Given the

current position of ginger ale, in general, as a product, it is critical for the company to further strengthen
its relationship marking in channels, i.e., develop long-term and/or trusting relationships with customers,

distributors, supplies or other parties in the marking environment. By doing such, it will enable CBNA to

have an efficient channel in place wherein the right type of products are delivered when and where it is

wanted – of which eventually lead to increase in sales regardless of variant.