SHAF 4033/SBSF 4033: STRATEGIC MARKETING SEMESTER 2 2019-2020

CASE STUDY 1: DR PEPPER/SEVEN UP. INC – SQUIRT BRAND

INSTRUCTION: Answer all questions.
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2. Based on the perceptual map of Grapefruit and Citrus Brands (Mid-2001) of the case study
(Exhibit 10), the company has decided to increase the Squirt relevancy with a younger segment
and to focus on Squirt’s thirst-quenching property. To effectively execute this marketing
decision, advice the company on:

(b) The advertising and promotion programs to increase consumption of Squirt in the
targeted segment. (16 marks)

Advertising:

First and foremost, Squirt need to increase their budget for advertising. Currently Squirt is
maintaining lower budget for advertising and promotion for double sales volume of its competitors. in
order to retain its sales volume and market share, Squirt should increase its advertising budget and
hence implement innovative adverting programs.
Media advertising expenditures for Squirt are typically less than competitors as those
budgeted amounts can be invested in other more important purpose such as adding more graphic on
billboard commercial, research and development process to achieve higher quality standard.
Squirt has its competitive advantage since it was more ‘thirst quenching’ than
‘refreshing’, which was not seen as either ‘hip and young’ or ‘not so cool and hip’ compare to its
competitors.
Hence, since this is the new potential market, the advertisement should be in the
language which the consumers prefer to, Hispanic Spanish language, Spanish. They should also focus
their television and radio advertisements on the interest of the Hispanic community.

1) Bilingual media advertising - Contain international language such as English, German,

French, Chinese and Japanese and other relative native language can be easily understood
by consumers who purchase the products at any country.

2) Consistently advertise - Squirt carbonated grapefruit soft drink in United States over
an extended period of time. These moves will eventually capture customer highest brand
awareness.
3) Social media advertising - Since most peoples around the world are smartphone users,
there was no excuse that they will not see Squirt advertisement either through photo,
poster, or video commercial.

4) Focusing on Hispanic population - Major consumers of Squirt belong to Hispanic

population. Squirt needs to reach Hispanic population by providing more fruit flavor. It
should use Spanish television channels and also Spanish.

5) Thirst-quenching - When consumers watched the advertisement, they will feel thirsty
and Squirt will show that they are the ones who can quench their thirst and give
refreshment to them.

6) Celebrity branding / celebrity endorsement – The benefits

of using a celebrity for advertising are the ability to: Build brand equity, meaning brand
power is acquired through the name recognition, which allows the company to achieve
larger sales and profits. Here Squirt can use Jennifer Lopez since she was a celebrity
from Hispanic.

7) Created a likable character named “Little squirt" - The appeal of "Little squirt” was
immediate and subsequently broadened squirt's attraction.

8) Partnering with a popular television program or event - Such alignment with a

popular TV program is sure to increase sales amongst all races within the targeting age-
demographic.

9) In-School Marketing – Not only marketing activities in and around the schools but also
payments made or items provided to schools under what are known as “competitive”
food and beverage contracts.

10) Website - The soft drink industry is also adapting to new forms of media and promotion,
utilizing the Internet and social media more than ever to communicate with their
consumers. Almost all brands have dedicated websites that have been developed with a
target audience in mind. The websites are used to provide additional information,
interactive opportunities, and promotions to consumers.

11) Lifestyle/activity
 Hip hop (Hip, cool, experiential nature) - Brought or collaborate with a team
of hip-hop artists or rappers who are famous and mostly one world will know

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 them such as Eminem, Big Shaq (singer of Mans Not Hot) or rappers from New
York itself which is Jim Jones.

 Sports (Daring, adventurous) - Action-oriented biking, skating settings,

college basketball, mountain bike, rollerblade. For example, Squirt campaign
that is aligned with the Olympics with Olympic athletes as spokespersons could
appeal to 18-24 year old regardless of race.

 Match-making Campaigns - To aid these love-searching urbanites, Squirt can

make the bottle caps of its Squirt extra tight. Afterward, the soft drinks will be
placed in a dispenser at the most romantic park in the city of New York, Los
Angeles, and Chicago since there was the most population of Hispanic. These
will make a woman who bought the extra tight squirt bottles and featured how
they weren't able to open the bottles.

12) Media include:

 Newspapers
 Spot of television
 Cable television
 Spot radio

Promotion:

Promotion includes all the weapons in the marketing armoury such as advertising, selling, sales
promotions, Direct Marketing, Public Relations and etc. Squirt should actually increase their
advertising budget so that to make their products are more alerted to the chosen target groups.

1) Recycle (Environmentally friendly)

Furthermore, the bottles can be recycled and it is environmentally friendly. As a result,
from that, the company will gain recognition from the environmental organization such as
WWF hence through the recognition given by the organization will gain customers’ trust on
the product which is environmentally friendly.

2) Bottler promotion campaign

Instruction written on the label bottle can be short, simple, and able to transmit the
product’s massages, thus grabbing attention from customers.

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3) Food, Cone & Belding estimation of Hispanic Squirt consumption on a Spanish-only
program for selected markets
Utilizing the Hispanics immigrant’s population in United States to lure Hispanics to
buy the Squirt product, due to the fact that majority of them often prefer to view and listened
the given advertisement in their relative native language.

4) Increase the range of product or increase the quality of a product

The Squirt product line consists of regular and diet squirt and regular and diet Ruby
Red squirt-a berry flavor extension introduced in 1993.
Squirt can produce isotonic drink or variety of flavors which more suitable for the 18 to
24 year old range and their life-style. Besides that, since this age range youth always drink
more soft carbonated drink, their health should be a concerned since the generation now is
moving towards healthy life-style. Thus, drink too much of carbonated soft drink will cause
high blood pressure, high sugar level, stroke and other diseases.

5) Special offers
The consumer is often still sensitive for price discounts and special offers. Squirt
should do promotion such as buy 12 bottles free 1 bottle for the customers to try.

6) Consumer price discounting

Because people prefer buying things on sale, discounts serve as a ploy to attract more
people to your store. Squirt can make price discounting by follow season. Such as el invierno
(winter). la primavera (spring). el verano (summer) Another word for summer, el estío, If
the discount is only good for a certain amount of days, need to mention it when Squirt
advertise the discounted items.

7) Collaboration with any industry such as sports or fashions

By put Squirt logo on their t-shirt, cap, sunglasses, belt, tie, handbag or etc. to give
people awareness about these brands.

8) Merchandising promotions
Include end-of-aisle displays, other types of special freestanding displays, and shelf
banners.

9) “spin-off” campaign
With commercials and packaging in Spanish. Such a campaign would reach all 18-24
year olds as well as all Hispanics, regardless of age.

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 10)Consumer promotions
Sponsorship of local sports, cultural and entertainment events, plastic cups and napkins
with the brand logo, and stylish baseball caps, T-shirts, or sunglasses featuring the brand
name.

11) Retail promotion

Selling and servicing retail outlets, placements and maintenance of advertisements, and
the restocking of retailer’s shelves and vending machines.

12)Promoting soccer events to Hispanic youth.

13)Sampling and promotional activities at various Hispanic festivals.

14) Raising money and featuring branded prizes during events in community parks for a
program that reaches both English- and Spanish-speaking preschool children.

15)Instructions in Spanish for sweepstakes to win toys.

16)Providing Spanish-language book covers to “Hispanic-designated” elementary schools.

17)Sponsoring basketball tournaments and streetball events for African American youth.

18) Sponsoring an essay contest tied to Black History Month for elementary, middle, and
high school students.

19) Cross-promotional advertisement for discounted admission tickets to an amusement park,

generally directed to “multicultural youth”.

20)Selling and trade promotion

Selling and trade promotion to and through bottlers to retail outlets

For brands’ popularity, Squirt can be associated with:

1) Various alternatives sport such as basketball, hiking, biking, skating, basketball, etc,.
2) Various entertainment programs such cinema, live TV shows, partnering with a
popular television program or event, festivals, etc,.

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3. The company is planning to execute market development strategy by capturing market
share among Hispanic community in the USA. Help the company implementing this
strategy by providing the following marketing information.

(a) Three opportunities for Squirt from the Hispanic consumer and carbonated soft
drinks industry structure perspectives. (12 marks)

Consumer preferences:
a) Young, cool, hip – Impact on positioning strategy
b) Drink more carbonated soft drink - In 2000, Americans consumed 53 gallons of soft
drinks per person, compared with about 47 gallons in 1990.
c) Taste and flavor preferences (Fruit-flavored carbonated beverages) - they want more
fruit-flavored carbonated beverages. Fruit-flavored soft drinks held a special appeal for
Hispanics in Southern California.
d) 21 to 24 years old life stage marked by the straddling of adult responsibilities and more
carefree times.
e) Teens and young adults generally are heavier consumers of regular soft drinks – Heavy
carbonated soft drink consumers.
f) The Hispanic population does not like hard sell messages and likes messages that are
real and relevant to them.
g) Hispanics prefer to shop closer to home in mom and pop stores.
h) About 50 percent of Hispanics in the United States are immigrants, many prefer to
converse in their native language.
i) The majority would prefer ads in Spanish (50%) while 30% prefer English and the rest
have no preference - prefer to view and listened the given advertisement in their
relative native language.
j) Youth - energetic, active in sport and they always on demand of drink to slake their
thirst.

Industry structure:
a) High density Hispanic market – Los Angeles (58% under 20 – this group will grow to
capture 80% by 2003)
b) Growth of Hispanic population – 57.9% (24M in 1990 to 35.3M in 2000) – Impact on
demand for Squirt and market growth.
c) Population growth compounded by rising per capita consumption produced an
estimated $60.3 billion in carbonated soft drink retail sales in 2000.
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d) By 2005, Hispanic youth will overtake African Americans to become the largest ethnic
youth population according to U.S.
e) Diversity of nationalities that make up the U.S. Hispanic population is apparent in
language and cultural differences - even though all nationalities speak Spanish, dialects
differ.
f) Account for 17 percent of all youth under age 18, and 45 percent of all minority minors
in the United States. By 2010, one minor in five will be Hispanic, amounting to a 22
percent increase in nine years.
g) Major soft drink companies have responded to the growing prominence of Hispanic
and African, American consumers and teens in different ways.
h) Per capita consumption of soft drinks is higher among Hispanics and African
Americans than other racial and ethnic groups and among teens than adults.
i) One-quarter of the U.S. population is Hispanic and African American.
j) The relative youthfulness of the Hispanic population is reflected in its population under
age 18 and its median age. While 25.7 percent of the U.S. population was under 18 in
2000, 35 percent of Hispanics were under 18.
k) Hispanics and African Americans contribute to 25 percent of the United States
population, representing a large target market which will require advertising tailored to
differences in language and/or culture.
l) 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.
m) In U.S 25% Americans are under 18 years of age and one quarter of U.S population is
Hispanic and African American - By a census in 2000, it was predicted that soon 17%
out of youth under the age of 18 will be Hispanic; also, they will amount to 45% of all
minorities in U.S thus surpassing African Americans to become the largest ethnic group
in U.S.
n) 58.5% of Hispanics in the US are Mexican
o) Hispanics represent 12.5% of total US population
p) 75% of Hispanics live in the western and southern United States
q) More than 50% of Hispanics live in California and Texas
r) From the top 9 Hispanic cities, 7 cities are in the west and south
s) It capitalizes on the key and opportunistic growth of the Hispanic community as well as
the association that exists between the younger generation and the consumption of soft
drinks

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 t) One major aspect that FCB did not take into account was the eastern United States;
even though 75% of Hispanics live in the west & south, New York is the most
populous Hispanic city in the US with 2.1 million Hispanics. Chicago (in the Midwest)
is the 3rd most populous Hispanic city with 753,000 Hispanics
u) Squirt has the least access to the New York market and New York has the largest
Hispanic population - A gold mine for Squirt.

(b) Strategic distribution channel initiatives to boost sales of Squirt in the Hispanic
consumers market. (16 marks)

Availability of current distribution channels:

 Concentrate producers – manufacture the basic flavors (for qxample, lemon-
lime and cola) for sale to bottlers,
 Bottlers - add a sweetener to carbonated water and package the beverage in
bottles and cans, which are then sold to retailers. Bottlers also responsible for
selling and servicing retail accounts, including the placement and maintenance
of in-store displays and the restocking of retailer shelves and vending machines
with their brands.
 Retail outlets - Selling and servicing retail outlets, placements and maintenance
of advertisements, and the restocking of retailer’s shelves and vending
machines.
 Supermarkets – Have a verity of beverages that they can choose and easy to
find because usually supermarket will be showing directions using signboard.
 Convenience stores – Young people nowadays need a faster movement to find
what they want.
 Vending machines – Easy for Hispanics to get the Squirt without communicate
with the cashier or supermarket/retail outlets
 Fountain service
 Mass merchandisers

Choice of retail outlets:

1) Location - prefer shopping close to home.
2) Variety - many options of flavor preferences. (Fruit-flavored carbonated beverages)

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3) Prefer to go - tend to patronize mom-and-pop grocery outlets, convenience stores, and
bodegas (a small shop that sells food and other items)
4) Language used - mostly can communicate to Spanish-speaking customers.
5) Price – Some retail outlets will mark-up the price. Since, Hispanics are sensitive with
price. They will choose the outlet that make price discounts and special offers.

Choice of vending machine:

1) Location – prefer choose the nearest one.
2) Variety - many options of flavor preferences. (Fruit-flavored carbonated beverages)
3) Convenience payment method – Can choose to pay with cash or card bank